Question

In: Finance

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 2 years ago
Next > < Previous

Related Solutions

Use the following corn futures quotes: Corn 5,000 bushels Contract Month Open High Low Settle Chg...
Use the following corn futures quotes: Corn 5,000 bushels Contract Month Open High Low Settle Chg Open Int Mar 455.125 457.000 451.750 452.000 −2.750 597,913 May 467.000 468.000 463.000 463.250 −2.750 137,547 July 477.000 477.500 472.500 473.000 −2.000 153,164 Sep 475.000 475.500 471.750 472.250 −2.000 29,258 Suppose you buy 27 of the September corn futures contracts at the last price of the day. One month from now, the futures price of this contract is 464.125, and you close out your...
Use the following corn futures quotes: Corn 5,000 bushels Contract Month Open High Low Settle Chg...
Use the following corn futures quotes: Corn 5,000 bushels Contract Month Open High Low Settle Chg Open Int Mar 455.125 457.000 451.750 452.000 −2.750 597,913 May 467.000 468.000 463.000 463.250 −2.750 137,547 July 477.000 477.500 472.500 473.000 −2.000 153,164 Sep 475.000 475.500 471.750 472.250 −2.000 29,258 Suppose you buy 16 of the September corn futures contracts at the last price of the day. One month from now, the futures price of this contract is 462.25, and you close out your...
Use the following corn futures quotes: Corn 5,000 bushels Contract Month Open High Low Settle Chg...
Use the following corn futures quotes: Corn 5,000 bushels Contract Month Open High Low Settle Chg Open Int Mar 455.125 457.000 451.750 452.000 −2.750 597,913 May 467.000 468.000 463.000 463.250 −2.750 137,547 July 477.000 477.500 472.500 473.000 −2.000 153,164 Sep 475.000 475.500 471.750 472.250 −2.000 29,258 Suppose you buy 18 of the September corn futures contracts at the last price of the day. One month from now, the futures price of this contract is 462.5, and you close out your...
3. Options contracts for corn are listed below. A single option contract is for 5,000 bushels,...
3. Options contracts for corn are listed below. A single option contract is for 5,000 bushels, but prices are quoted per bushel. For example, if someone wanted to purchase a December 2018 put option with a strike price of $3.60, then the premium would be $400 (= $0.08 x 5,000 bushels). The maturity dates are the same as the futures contracts. Expiration Strike Call Put DEC 2018 $3.60 $0.41 $0.08 DEC 2018 $3.70 $0.35 $0.12 DEC 2018 $3.80 $0.30 $0.17...
Soybean futures contracts are quoted in cents per bushel. Thereare 5,000 bushels per contract. The...
Soybean futures contracts are quoted in cents per bushel. There are 5,000 bushels per contract. The price lit or circuit breaker for soybeans is 60 cents. The quote for Sep. 2021 is 989'6. The prior settle was 986'4. What is the upper and lower limits for trading this contract today?
Soybean futures contracts are quoted in cents per bushel. Thereare 5,000 bushels per contract. The...
Soybean futures contracts are quoted in cents per bushel. There are 5,000 bushels per contract. The price lit or circuit breaker for soybeans is 60 cents. The quote for Sep. 2021 is 989'6. The prior settle was 986'4. What is the upper and lower limits for trading this contract today?
A company enters into a short futures contract to sell 5,000 bushels of wheat for 250 cents per bushel.
a) A company enters into a short futures contract to sell 5,000 bushels of wheat for 250 cents per bushel. The initial margin is $3,000 and the maintenance margin is $2,000. What price change would lead to a margin call?b) How does the cost-of-carry argument for commodity futures differ from futures written on other classes on assets? How would you explain differences in the sign and magnitude of the basis across different classes of commodities?
Suppose a farmer anticipates to harvest 500,000 bushels of soybeans. Contract size is 5,000 bushels. The...
Suppose a farmer anticipates to harvest 500,000 bushels of soybeans. Contract size is 5,000 bushels. The initial margin and maintenance margin for soybean futures are $1,980 and $1,800 per contract, respectively. Currently, the farmer has $200,000 cash in his brokerage account, and the price of March 2021 soybeans futures contract is $10.00/bushel. A.) describe how the farmer would hedge his harvest. Clearly state the number of soybeans futures contracts the farmer should buy OR sell. b.) how much money would...
Look at the futures listings for corn in Figure 2.10.    a. Suppose you buy one...
Look at the futures listings for corn in Figure 2.10.    a. Suppose you buy one contract for July 2012 delivery. If the contract closes in July at a price of $6.66 per bushel, what will be your profit or loss? (Each contract calls for delivery of 5,000 bushels.)      (Click to select)LossProfit $       b. How many July 2012 maturity contracts are outstanding?      Number of outstanding contracts   
A company enters into a short futures contract to sell 5000 bushels of wheat for 450...
A company enters into a short futures contract to sell 5000 bushels of wheat for 450 cents per bushel. The initial margin is $ 3000 and the maintenance margin is $2000. What price change would lead to a margin call? Under what circumstances could 1,500 be with drawn from the margin account? Please provide formulas thank you
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT