Question
ADM purchases 55,000 bushels of soybeans in July. In January, when the spot price of soybeans was $10.5/bushel, ADM hedged the entire planned purchase with
ADM purchases 55,000 bushels of soybeans in July. In January, when the spot price of soybeans was $10.5/bushel, ADM hedged the entire planned purchase with September futures contracts at 1030. ADM lifts the hedge in July. The spot price of soybeans is now $10.50/bushel and the basis on September futures is now $0.05. What is ADM's effective price per bushel for the transaction (rounded positive $ two places after the decimal)?
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Intermediate Accounting
Authors: Donald Kieso, Jerry Weygandt, Terry Warfield, Nicola Young,
10th Canadian Edition, Volume 1
978-1118735329, 9781118726327, 1118735323, 1118726324, 978-0176509736
