Question: basic risk: A short haired for a corn grower. The expected basis is -$0.30. An actual basis is -$0.40. A. what is the forward price?

basic risk: A short haired for a corn grower. The expected basis is -$0.30. An actual basis is -$0.40.

A. what is the forward price?

B. what is the expected profit margin?

C. what is the futures price on May 10?

D. what is the gain or loss on futures market results?

E. what is the gain or loss on Cash market result?

F. what is the realized price or net selling price?

G. what is the overall profit?

basic risk: A short haired for a corn grower. The expected

Homework 3.2 (Chapter 3) Name: ID: Plisase SHOW YOUR WORK 3. Basis risk: A short hedge for a corn grower. The expected basis is 5-0.30. And the actual basis is 8-0.40. Date Cash Futures 1-Oct Cost of Production $6.00! May Futures $6.40 (A) What is the forward price? (B) What is the expected profit margin? 1-Oct Sell May Futures @ $6.40 10-May. Sell Cash @ $5.701 Buy May Futures (C) What is futures price on May 10th? = (D) What is the gain or loss on futures market result? = (E) What is the gain or loss on cash market result? (F) What is the realized price for net selling price)? = _ (G) What is the overall profit? a ? 4. Basis risk: A short hedge for a com grower. The expected basis is S-0.30. And the actual basis is 0.20 Date Cash Futures 1-Oct Cost of Production $6.00 May Futures $6.40 (A) What is the forward price? - (B) What is the expected profit margin? = 1-Oct Sell May Futures @ $6.40 10-May Sell Cash @ ?? Buy May Futures @ $5.90 (C) What is cash price on May 10th? (D) What is the gain or loss on futures market result? = (E) What is the gain or loss on cash market result? (F) What is the realized price (or net selling price)? (G) What is the overall profit? = _

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