Question
For the next 2 questions. A trader enters into a SHORT cotton futures contract when the futures price is 50 U.S. cents per pound (weight
For the next 2 questions. A trader enters into a SHORT cotton futures contract when the futures price is 50 U.S. cents per pound (weight measure). The contract is for the delivery of 50,000 pounds of cotton.
4. How much does the trader gain or lose if the cotton price at the end of the contract is 45.30 cents per pound? a) $900 b) $2,350 c) -$22,650 d) -$900 e) -$2,350 f) None of the above
5. How much does the trader gain or lose if the cotton price at the end of the contract is 52.80 cents per pound? a) -$28,000 b) -$1,400 c) $1,400
d) $26,400 e) None of the above
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