2. In May after planting, a soybean farmer places a short hedge by selling the futures at $12.55/bu. In October after harvest, the farmer sells the soybean in the cash market at $12.42/bu.

If in October the futures price is $12.47, what is the net selling price? a. $12.42 c. $12.50 b. $12.47 d. $12.60

(Continued from Q2) If in October the basis turns out to be -10 cents (or 10 cents under), what is the net selling price? a. $12.45 c. $12.65 b. $12.55 d. $12.75

(Continued from Q2) If in October the basis turns out to be 10 cents (or 10 cents over), what is the net selling price? a. $12.45 c. $12.65 b. $12.55 d. $12.75