A corn futures contract is 5,000 bushels. If you buy a contract of corn at 356...

A corn futures contract is 5,000 bushels. If you buy a contract of corn at 356 and sell it for 336, what will your profit or loss be? (Assume you don’t pay any commissions or fees for the entry and exit transactions.)

		10 dollars loss
		1,000 dollars loss
		10 dollars profit
		1,000 dollars profit

Solutions

Expert Solution

con contract is quated in cents

buy price of corn contract 356cents /bushels

sell price per bushell 336cents/ bushels

loss = 356-336

= 20cents / bushells

future contract is 5000 bushels

thefore total loss = 20 * 5000

= 100000 cents

convert into dollar 100000/100 =$1000

loss of 1000 dollars

jeff jeffy answered 1 year ago

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