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5. Consider the table below. Time The Plain Bread Company knows it The December futures price is June 10 will need to buy a large
5. Consider the table below. Time The Plain Bread Company knows it The December futures price is June 10 will need to buy a large amount of $6.60. wheat on December 10. The current spot or cash price is $6.40 per pound. Wheat cash or spot price is expected Assume futures price (after the December to be 6.60 fact, or observed on December 10 10) is 6.65. Results A. Calculate the price of wheat paid by The Plain Bread Company if it cancels out (mark to market transaction) futures contracts on December 10. B. If The Plain Bread Company can accept delivery of the futures, calculate price of wheat paid by The Plain Bread Company
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