Suppose today is March 27, 2018, and your firm produces breakfast cereal and needs 85,000 bushels...

 

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Suppose today is March 27, 2018, and your firm produces breakfast cereal and needs 85,000 bushels of corn in May 2018 for an upcoming promotion. You would like to lock in your costs today because you are concerned that corn prices might go up between now and May. Use Table 25.2 a. What is the total price are you locking in for the 85,000 bushels of corn based on the day's closing price? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) b. Suppose corn prices are $4.08 per bushel in May. What is the profit or loss on your futures position? (Enter your answer as a positive value. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) Total cost a. b. Table 25.2 Futures Contracts Quote, March 28, 2018 SOURCE: The Wall Street Journal, March 28, 2018, www.wsj.com. Futures Contracts Metal & Petroles agh hilo High (CMO) 25.000 2.9760 2.9775 XXX Is ててて UNSS 25555 FER ~~~ 32000 3400 227.75 228.75 037.75 1042.00 ~2221 2928 NNNN GRAN 233.000 *** 53 勰酸 湖ē 五殁帳噌 434.252 1977 14201-0075 180, 805 reas Al 05361 05331-00016 197,395 E-125,000 $par 120x1200 12448 12478 Index Futures Mini DJ Industrial Average (CBT)-$5xnx 38121 23691 23859 &P500 Index (CME)-$250x Index June 2661.20 2679.20 2598.00 2615.70 43.80 58,5% 003472506002615 TS-4175-2000 ST Sept 2665.00 2684.25 2600.75 2620.25 -44.25 54,000 Mini S&P Midcap 400(CM) 5190 -28.70 79.747 Mini Nasdag 100(CM)-520x June 6775.3 6849.3 6490.0 65613-2123 229719 6592.8 -213.0 4,632 Mil Russell 20007225 June 1548.00 1557.00 1509.10 1518.00-2630 9.254 Mini Russell 1000 OCE-US-4110 1451.70 14.20 une sens Ja 28.43 09.25 Source SIX Financial Information Suppose today is March 27, 2018, and your firm produces breakfast cereal and needs 85,000 bushels of corn in May 2018 for an upcoming promotion. You would like to lock in your costs today because you are concerned that corn prices might go up between now and May. Use Table 25.2 a. What is the total price are you locking in for the 85,000 bushels of corn based on the day's closing price? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) b. Suppose corn prices are $4.08 per bushel in May. What is the profit or loss on your futures position? (Enter your answer as a positive value. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) Total cost a. b. Table 25.2 Futures Contracts Quote, March 28, 2018 SOURCE: The Wall Street Journal, March 28, 2018, www.wsj.com. Futures Contracts Metal & Petroles agh hilo High (CMO) 25.000 2.9760 2.9775 XXX Is ててて UNSS 25555 FER ~~~ 32000 3400 227.75 228.75 037.75 1042.00 ~2221 2928 NNNN GRAN 233.000 *** 53 勰酸 湖ē 五殁帳噌 434.252 1977 14201-0075 180, 805 reas Al 05361 05331-00016 197,395 E-125,000 $par 120x1200 12448 12478 Index Futures Mini DJ Industrial Average (CBT)-$5xnx 38121 23691 23859 &P500 Index (CME)-$250x Index June 2661.20 2679.20 2598.00 2615.70 43.80 58,5% 003472506002615 TS-4175-2000 ST Sept 2665.00 2684.25 2600.75 2620.25 -44.25 54,000 Mini S&P Midcap 400(CM) 5190 -28.70 79.747 Mini Nasdag 100(CM)-520x June 6775.3 6849.3 6490.0 65613-2123 229719 6592.8 -213.0 4,632 Mil Russell 20007225 June 1548.00 1557.00 1509.10 1518.00-2630 9.254 Mini Russell 1000 OCE-US-4110 1451.70 14.20 une sens Ja 28.43 09.25 Source SIX Financial Information

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