Q8. On OCT 1, 2020 a farmer had a contract to sell 50,000 bushels of wheat...
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Q8. On OCT 1, 2020 a farmer had a contract to sell 50,000 bushels of wheat on JAN 15, 2021; the spot market price was $3.25/bushel. On OCT 1, 2020 the future price was: $4.00/bushel for MAR 2021 delivery. Carry all your calculation in price per bushel. 8.1 Use a time table to show the hedge that the farmer opened on OCT 1, 2020. 8.2 On JAN 15, 2021 the farmer traded the 50,000 bushels in the spot market for $2.95/bushel and closed the hedge; the futures price for MAR 2021 delivery was $3.00/bushel. Use the same time table to show the markets activities on JAN 15, 2021 and calculate the price/bushel received by the farmer. Q8. On OCT 1, 2020 a farmer had a contract to sell 50,000 bushels of wheat on JAN 15, 2021; the spot market price was $3.25/bushel. On OCT 1, 2020 the future price was: $4.00/bushel for MAR 2021 delivery. Carry all your calculation in price per bushel. 8.1 Use a time table to show the hedge that the farmer opened on OCT 1, 2020. 8.2 On JAN 15, 2021 the farmer traded the 50,000 bushels in the spot market for $2.95/bushel and closed the hedge; the futures price for MAR 2021 delivery was $3.00/bushel. Use the same time table to show the markets activities on JAN 15, 2021 and calculate the price/bushel received by the farmer.
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81 On Oct 1 2020 the farmer could hedge their contract to sell 50000 bushels of wheat by simultaneou... View the full answer
Related Book For
Money, Banking, and the Financial System
ISBN: 978-0134524061
3rd edition
Authors: R. Glenn Hubbard, Anthony Patrick O'Brien
Posted Date:
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