Question
A farmer wants to ensure he gets close to $11 per bushel of soybeans. He anticipates to harvest 20k bushels of beans by Oct. of
A farmer wants to ensure he gets close to $11 per bushel of soybeans. He anticipates to harvest 20k bushels of beans by Oct. of 2023. The spot price today (fall of '22) is $11 per bushel, while Nov. '23 futures are trading at $11.33. Each contract is for 5,000 bushels of beans. One month prior to the delivery date, S=$5.01 & F=$5.14. If the farmer decides to unwind and sell beans, what is the effective price?
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School Finance A Policy Perspective
Authors: Allan Odden, Lawrence Picus
6th Edition
1259922316, 9781259922312
