1a) You just heard a news story that all fracking operations are being ordered to cease and all cars are expected to run on 50% ethanol within the next few years. You believe this will have a dramatic increase on corn futures. You check online and corn futures one year from now are quoted at 4014. The contract size is 5,000 bushels. What is the market value of 3 contracts? (show your calculations). b) Margin requirements are 15%. How much capital must you put down to make this transaction?

2

) Calculate the VRE (Value of ROE) of each stock listed. (Record the company name and VRE)

Company	ROE	ROA	Beta	P/E Ratio	VRE
Apple	10.5%	8.86%	.95	23
McDonald's	14%	1.85%	1.32	7
Proctor & Gamble	40.4%	7.21%	.40	12
Exxon Mobil	35%	7.77%	1.36	23

2b) Based upon your calculations, which stock would a value investor be most interested in from the following list? Why?