A grain exporter needs 1.9 million bushels of wheat to export in the month of December. In August, they are fairly certain wheat prices are going to go up, so they want to lock in prices for November purchase. They decide to hedge and purchase December KC HRW contracts. In August, the December futures price is $8.9875 with a basis of - $0.09. Brokerage fees for each contract is $5.00 round turn. On November 15, December KC HRW futures are trading at $9.0475 per bushel and the cash price is $8.9975. What was the net price paid per bushel for this scenario?
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- A firm in Canada is due to receive payment of US$1 million in 8 years’time. It would like to protect itself against a decline in the value of the USdollar, but finds it difficult to get forward cover for such a long period, isthere any other way in which it can protect itself? Explain4. EncryptCo is a Canadian company considering an international contract with a firm in the nation of Iceberg. The contract will last 5 years. It will involve the construction of an electrical generator for a residential area in Iceberg's largest city, Snowville. Iceberg's national currency is the blizzar. The table below contains data for the project. Complete this question using Excel. Include the output onto your solution and please ensure that it fits onto a page. First Cost (Blizzars) Net Revenue 2022 to 2027 (Blizzars) Expected Iceberg Inflation Rate Value of the Blizzar VS Canadian dollar in 2022 ($) Expected annual rate of decline of the value of the Blizzar VS the Canadian dollar Expected Inflation in Canada EncryptCo's Real MARR 1,800,000 550,000 10% $1.25 5% 6.5% 15% (a) Find the present worth of the project assuming no inflation. (b) Find the present worth of the contract using the above inflation rates. (c) Should EncryptCo pursue the project given the above inflation…Assume you are a soybean producer wanting to establish a selling price range. You purchase a $10.00 put for 11 cents and sell a $11.00 call for 12 cents. The expected basis is 25 cents under Nov Soybean futures. What is your anticipated selling price range? Find the floor price and ceiling price.
- With all else equal, an increase in the demand for lean hogs and a decrease in the supply of lean hogs will lead to an increase in Lean hog futures contract prices. Selected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer. a b Question 4 True FalseSuppose that: i. The spot price of oil is US$90 ii. The quoted 1-year futures price of oil is US$75 iii. The 1-year US$ interest rate is 5% per annum iv. The storage costs of oil are 1% per annum Is there an arbitrage opportunity? If so, explain the strategy that you will follow.Subpart D to be answered 1. Assuming that the product’s price is P58 per pack, should the competitor sell in the short-runWhy or why not?If it decides to sell, what will be the profit-maximizing (or loss-minimizing output per day)?What is the profit (or loss) that the seller can realize per day? What is the profit (or loss) per pack?A. Assuming that the product price is P42 per pack, answer the same questions in letter A.B. Because of increasing sellers of masks in the market, the product’s price further decreased to P32per pack. Again, answer the same questions in letter A.C. When is this seller going to shut down?D. Now generate the seller’s supply curve of mask in the short run.
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- There is a beer company and a bottling plant. The beer company can make 100 gallons of beer for $200. Note that 1 gallon is enough for 16 8-ounce cans. A canning company can can 1600 cans of beer for a cost of $0.25 each (including transportation costs). Canning services can be bought and sold on the open market for $0.50 per can. A can of beer sells for $1. A. Find the outside option profit for each firm Now imagine that the canning company can move near the beer company for $100. Doing this will decrease the cost off canning to $0.10 per can.Ex Ante B. What is the maximum total profit generated by both firms working to-gether? C. Find the nash bargaining profit for each firm.Ex PostNow assume that the canning company has moved. They can still sell theircanning services on the open market and doing so will still cost $0.25 per can. D. Find the new outside option for each firm. E. Find the new nash bargaining profit for each firm.And plug label until the enc the same terms). Note that adding a negative number is the same as subtracting a pc nts $182.5 $104.6 +I + $48.8 – $5.2 Now group together the constants on the right-hand side: $182.5 = $104.6 + $48.8 – $5.2 +| еВook $182.5 = $148.2 +1 Print And get the unknown variable I on one side by itself by subtracting $148.2 from both si $182.5 - $148.2 = 1 References And simplify to solve for I: | = $34.3 billion An equation for Aggregate Expenditure is: AE = $3600 – 0.8Y, In equilibrium, Income 'Y' = Aggregate Expenditure 'AE! Solve for Y. Y = $ ........: Mc Graw Hill < Prev 3 of 5 Score ans MacBook Air F1 F2 F3 F4 F5 F6 F7 #3 2$ & 1 2 3 4 Q W R YWhich of the following statements with respect to a currency option is wrong? O a. OMR option is available and traded in the Omani financial market. O b. An option can be executed using the strike price only. Oc. Put option gives the buyer the right to sell the foreign currency. O d. Call option will be used by importers.