1 . Assume you are a soybean producer. On June 20, you decide to hedge the sale of a portion of your expected bean crop for delivery in the fall. Are you going to initially buy or sell the November futures contract?

2. Assume you are a soybean producer. On June 20, you decide to hedge the sale of a portion of your expected bean crop for delivery in the fall. Currently, November futures are trading at $7.20 per bushel. The next trading day, the November soybean contract settles at $6.96/bu. How much money is put into or taken out of your margin account by the clearing corporation? The initial and maintenance margin for soybean hedgers is $1000, and there are 5000 bushels per contract. Put your answer in terms of a positive (money put in) or a negative (money taken out) number.

3. Assume you are a soybean producer. On June 20, you decide to hedge the sale of a portion of your expected bean crop for delivery in the fall by entering a November futures contract at $7.20 per bushel. By October, the local elevator price for soybeans has declined to $6.00 per bushel. You sell your soybeans for that cash price, and you offset your futures contract at $6.70 per bushel. What is your harvest-time basis? Be sure to specify if it is positive or negative by placing a minus sign in front of the number if it is negative.

4. Assume you are a soybean producer. On June 20, you decide to hedge the sale of a portion of your expected bean crop for delivery in the fall by entering a November futures contract at $7.20 per bushel. By October, futures price is $7.54 per bushel. You sell your soybeans on the cash market, and you offset your futures contract at $7.54 per bushel. What is your gain or loss on the futures contract (in dollars per bushel)? Put your answer in the form of a positive (gain) or negative (loss) number.

5. Assume you are a soybean producer. On June 20, you decide to hedge the sale of a portion of your expected bean crop for delivery in the fall by entering a November futures contract at $7.20 per bushel. By October, futures price is $7.00, and your actual basis is $-0.82/bu. You sell your soybeans on the cash market, and you offset your futures contract at $7.00 per bushel. What is your net hedge price for the beans in dollars per bushel?

6. Assume you're a cow-calf operator and you want to lock in a price for part of the feeder cattle you expect to be selling. Would you initially buy or sell the futures contract?

7. Assume you're a cow-calf operator and you want to lock in a price for part of the feeder cattle you expect to be selling. You see that the futures contracts for feeder cattle are currently trading at $65/cwt, and you expect to have a basis of $-2/cwt. What is your expected hedge price if you sell a futures contract at this price (in $/cwt)?

8. Assume you're a cow-calf operator and you locked in a price for part of the feeder cattle you expect to be selling. Consider the following levels of closing futures, $89cwt, and basis, $-3/cwt, at selling time. What is your cash selling price (in $/cwt)?

9.Assume you're a cow-calf operator and you locked in a price for part of the feeder cattle you expect to be selling by selling a futures contract at $68/cwt. Consider the following levels of closing futures, $71cwt, and basis, $-5/cwt, at selling time. What is your gain or loss on the futures contract (in $/cwt)?

10. Assume you're a cow-calf operator and you locked in a price for part of the feeder cattle you expect to be selling by selling a futures contract at $72/cwt. Consider the following levels of closing futures, $88cwt, and basis, $4/cwt, at selling time. What is your net hedge price (in $/cwt)?

11. You are a cattle feeder, and you want to provide some price protection for you upcoming feed costs. To hedge the purchase price for your upcoming corn purchase, would you buy or sell a corn futures contract?

12. You are a cattle feeder, and you want to provide some price protection for you upcoming feed costs. Currently the nearby corn futures are trading at $4.70/bu. The elevator usually quotes you a price that is $-0.25/bu under futures for corn. You place the hedge. Calculate your expected hedge price (in $/bu).

13. You are a cattle feeder, and you had hedged the purchase price for your feed costs by hedging with a futures contract at $2.72/bu. You are now ready to purchase the corn that you had hedged. You offset the futures contract at the same time at $3.25/bu. Your ending basis is $-0.20/bu. Calculate your CASH purchse price (in $/bu).

14. You are a cattle feeder, and you had hedged the purchase price for your feed costs by hedging with a futures contract at $4.73/bu. You are now ready to purchase the corn that you had hedged. You offset the futures contract at the same time at $2.93/bu. Your ending basis is $-0.25/bu. Calculate your gain or loss on the futures contract (in $/bu). Be sure to signify your number with a negative sign in front if it is a loss.

15. You are a cattle feeder, and you had hedged the purchase price for your feed costs by hedging with a futures contract at $2.44/bu. You are now ready to purchase the corn that you had hedged. You offset the futures contract at the same time at $3.06/bu. Your ending basis is $-0.50/bu. Calculate your acutal net hedge price (in $/bu).