Finance 338 Homework 18-Derivatives Finance 338 Homework 18 - Derivatives Spring 2018 Single futures contract for corn is for 5,000 busheld but prices are quoted per bushel. For example, the total payment at maturity for one May 2018 contract would be $18,400 (5,000 bushels*$3.68 per bushel). Contracts are available that expire in March (14 Mar 2018). Mav (14 May 2018), July (15 au 2018), September (14 Sept 2018) and December (14 Dec 2018) of this year. Maturity Futures Date Price MAY 2018 $3.68 |JUL 2018 | $3.76 |SEP 2018 $3.83 | DEC 2018 | $3.92 MAR 2019 $4.00 6. Can Firm A completely hedge its price risk using futures if it needs to purchase 11.000 bushels of corn on December 1, 2018? If yes, then explain how. If no, then explain why. 7. Can Firm A completely hedge its price risk using futures if it needs to purchase 10,000 bushels of corn on December 14, 2018? If yes, then explain how. If no, then explain why. 8. Assume Firm A needs to purchase 10,000 bushels of corn on December 14, 2018. It decides to purchase futures contracts to hedge its price risk. Fill in the table below with the total payoff from the contract(s) for the different prices at maturity