A seller of cattle is looking to protect from price risk while his cattle are being fed in January. The current cash market is $66\mathrm{.}50,$ and the current MAR futures is $68\mathrm{.}50.$ Answer the following questions.

$32.$ What price is the producer trying to lock$-$in$?$

a$.68\mathrm{.}50$

b$.66\mathrm{.}50$

c$.68\mathrm{.}50+$ basis

d$.68\mathrm{.}50-$ basis

$33.$ What initial position in the futures market would the seller of cattle take to hedge his$/$her risk in the cash market?

a$.$ Buy

b$.$ Sell

c$.$ Long

d$.$ Purchase a Call Option

$34.$ If this hedger decided the lock$-$in was not a good price, what position would the hedger initially take in the futures market?

a$.$ Buy

b$.$ Purchase a Call Option

c$.$ Purchase a Put Option

d$.$ Long

Consider the ending cash price when cattle are ready is $$64\mathrm{.}50,$ and MAR contract is $65\mathrm{.}50.$

The producer hedged his cattle in futures market with a MAR contract.

$35.$ What is the profit on hedge $($per unit$)?$

a$.3\mathrm{.}00$

a$.2\mathrm{.}00$

b$.66\mathrm{.}50$

c$.64\mathrm{.}50$

$36.$ What is the sellers net cash price

a$.67\mathrm{.}50$

b$.61\mathrm{.}50$

c$.66\mathrm{.}50$

d$.64\mathrm{.}50$