Assume that the price of December 2021 corn futures is $4.65/bushel in February and $4.50 in October. If spot cash price in October is $4.55, what is the farmer's total revenue? Assume he entered into 20 contracts. Each corn contract is 5000 bushels.
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Assume that the price of December 2021 corn futures is $4.65/bushel in February and $4.50 in October. If spot cash price in October is $4.55, what is the farmer's total revenue? Assume he entered into 20 contracts. Each corn contract is 5000 bushels.
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- You are the buyer for a cereal company and you must buy 80,000 bushels of corn next month. The futures contracts on corn are based on 5,000 bushels and are currently quoted at 415′0 cents per bushel for delivery next month. If you want to hedge your cost, you should _____ contracts at a cost of _____ per contract.A trader bought two July futures contracts. Each contract is for the delivery of 1,000 barrels. The initial margin is $11,250 per contract and the maintenance margin is $9,000. Calculate the daily gain and loss and margin account balance from April 13, 2020 to April 15, 2020 and explain when the investor will receive a margin call and how much does he need to top up?A farmer sells futures contracts at a price of $6.70 per bushel on 10,000 bushels of corn. The spot price of corn is $6.55 at contract expiration. What is the farmer's profit on the futures contracts?
- A farmer sells one corn futures contract at a price of $5.84 per bushel. The spot price of corn drops to $4.65 when the contract expires and the farmer delivers her corn. If the farmer harvested 24,000 bushels of corn and had futures contracts on 20,000 bushels of corn, what is the farmer's net proceeds when corn is sold?On November 29, 2019 you bought one July 2020 maturity corn futures contract at a futures price of $3.90 per bushel. If the price of the corn in the market in July 2020 (on the maturity date) is $3.78, what is your profit/loss? The contract multiplier is 5000 bushel.XYZ flour company is planning to buy wheat for the next year’s production. 10,000 bushels of wheat will be purchased each quarter, on the 15th of January, April, July, and October in 2022. It wants to lock the wheat price using a futures contract, and at the same time use a swap to prepare the expenditure. The spot price of wheat today (April 15, 2021) is $3.1 per bushel, and the company enters futures contracts today. The prevailing interest rate is 1.5%, compounded continuously. Recall that each futures contract is for 5000 bushels and assume no storage cost of wheat. (a) If the company uses a prepaid swap, what is the prepayment? (b) If the company uses a plain vanilla swap for the quarterly purchase next year, what is the fixed amount?
- A farm that produces corn is looking to hedge their exposure to price fluctuations in the future. It is now May 15th and they expect their crop to be ready for harvest September 30th. You have gathered the following information: Bushels of corn they expect to produce 44,000 May 15th price per bushel $3.08 Sept 30 futures contract per bushel $3.22 Actual market price Sept 30 $3.37 Required (round to the nearest dollar): Calculate the gain or loss on the futures contract and net proceeds on the sale of the corn. Net gain or loss on future $Answer Sell the corn $Answer Net $AnswerLast week, you sold a futures contract on 5,000 troy ounces of silver at a settle price of S 23.10. Today, you made delivery and the daily settle price was $23.15. What amount will you receive at the time of delivery? Assume yesterday's settle price was $23.19.A farmer sells futures contracts at a price of $3.65 per bushel. The spot price of corn is $3.15 at contract expiration. The farmer harvested 21000 bushels of corn and sold futures contracts on 20000 bushels of corn. What are the farmer's proceeds from the sale of ALL the corn? Group of answer choices 73,911 81,040 76,150 68,372 84,711
- At the end of six months for a wheat farmer who sold previously a six-month wheat futures contract, he may: a. deliver the wheat as per the contract and pay out the original agreed-upon price. b. can sell the wheat via the spot grain market and at the same time sell a futures contract identical to the contract originally taken out. c. will make a profit if the price of wheat has gone up on the day the farmer closes out his contract. d. can sell the wheat via the spot grain market and at the same time buy a futures contract identical to the contract originally taken.as a soybean buyer, you are concerned about soy prices. Currently, they are at $60 per bushel .Therefore, you enter into the appropriate futures contract at the current spot price. What is your profit or loss, if six months later, soybean is selling at the spot market for 51 bushell? why?Three days ago, you entered into a futures contract to sell €125,000 at $1.40 per €. Over the past three days the contract has settled at $1.32, $1.28, and $1.26. You start with $3,000. What is your total profit or loss in $ for the 3-day period?