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Chapter 8 #5. On July 10, a farmer observes that the spot price of corn is $2.735 per bushel and the September future price is

Chapter 8

#5. On July 10, a farmer observes that the spot price of corn is $2.735 per bushel and the September future price is $2.76.The farmer would like a prediction of the spot price in September but believes the market is dominated by hedgers holding long positions in corn.Explain how the farmer would use this information in a forecast of the future price corn.

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Fundamentals of Multinational Finance

Fundamentals of Multinational Finance

Authors: Michael H. Moffett, Arthur I. Stonehill, David K. Eiteman

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