Sarah exports coffee from Indonesia to Seattle. On December 1, 2023, Sarah lines up a buyer who agrees to purchase 75,000 pounds of coffee for delivery in September of 2024. Sarah and the buyer agree on a price of "September -3" (September minus 3). Fast forward to September of 2024 where for purposes of this exam question, the price of the September coffee futures contract moves to 320. On December 1, 2023, the price of the September contract was trading from 174. Sarah and the buyer agree to settle their business deal based on the new closing price of the September contract of 320. Assume that Sarah did everything correctly based on what we learned about proper hedging practices. How much did Sarah make or lose in total? , based on the combination of any gain or loss on the futures trade combined with what she collected from the buyer?

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Answer To solve this problem we need to calculate the gain or loss from the futures trade and the am... View the full answer