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1) Is the individual concerned about price increasing or decreasing? 2) What is the initial action in the futures market: buy or sell? 3) What

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1) Is the individual concerned about price increasing or decreasing? 2) What is the initial action in the futures market: buy or sell? 3) What is the cash price paid/received by the individual later? 4) Did the individual earn a profit or loss in this hedging situation? Enter profit or loss in the following blank. 5) What is the value (i.e. amount) of the profit/loss on the hedge for one contract (signs matter)? 6) The basis was initially - $3.00 and ended up being 7) The hedged price in this example was not the current cash price due to the basis changing. What was the hedged priceet selling price? 8) What was the expected cash price the individual would pay/receive when the hedge Was initiated? 9) Due to the use of hedging, was the net purchase/selling price increased or decreased due to the basis changing relative to what would have happened if the individual did not hedge? 1) Is the individual concerned about price increasing or decreasing? 2) What is the initial action in the futures market: buy or sell? 3) What is the cash price paid/received by the individual later? 4) Did the individual earn a profit or loss in this hedging situation? Enter profit or loss in the following blank. 5) What is the value (i.e. amount) of the profit/loss on the hedge for one contract (signs matter)? 6) The basis was initially - $3.00 and ended up being 7) The hedged price in this example was not the current cash price due to the basis changing. What was the hedged priceet selling price? 8) What was the expected cash price the individual would pay/receive when the hedge Was initiated? 9) Due to the use of hedging, was the net purchase/selling price increased or decreased due to the basis changing relative to what would have happened if the individual did not hedge

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