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financial accounting question Bill Bloggs has 10,000 shares in Carlton Ltd. The current price in Carlton Ltd is $9.50. Bill Bloggs would like to sell
financial accounting question
Bill Bloggs has 10,000 shares in Carlton Ltd. The current price in Carlton Ltd is $9.50. Bill Bloggs would like to sell the shares immediately, but certain restrictions have been imposed upon him that mean he will have to wait one month. Concerned about fluctuating prices, he decides to enter into a futures contract on Carlton Ltd shares in which he takes a sell position. The price of Carlton Ltd future is $9.70, and his futures contract is for 10,000 units. One month later the price of Carlton Ltd shares has risen to $12.10 and a Carlton Ltd future cost $12.29. Bill Bloggs closes out his futures contract and sells his shares. How much does Bill Bloggs receive from the above transaction? Please write your answer in the grey text box provided below. 5 Step by Step Solution
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