Suppose that in the 5 days following a farmer's sale of September wheat futures at a futures
Question:
Suppose that in the 5 days following a farmer's sale of September wheat futures at a futures price of $5.83, the futures price is:
At the end of day 5, the farmer decides to quit wheat farming and buys back his futures contract.
What payments are made between the farmer and the exchange on:
a. Day 1?
b. Day 2?
c. Day 3?
d. Day 4?
e. Day 5?
What is the total payment over the 5 days? Would the total payment be any different if the contract was not marked to market?
Transcribed Image Text:
Day Price 5 $5.83 $5.89 $5.70 $5.50 $5.60
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Related Book For
Fundamentals of Corporate Finance
ISBN: 978-1259722615
9th edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus
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