Suppose today is May 1, 2014, and your firm produces breakfast cereal and needs 90,000 bushels of corn in July 2014 for an upcoming promotion. You would like to lock in your costs today because you are concerned that corn prices might rise between now and July. Each contract is for 5,000 bushels; the settle price for July 2014 is $5.19 per bushel.

How many contracts do you buy?

Answer rating: 100% (QA)

To lock in your costs today for corn needed in July 2014 you need to calculate how many con... View the full answer