Question
George Q. Farmer grows soybeans. He estimates his October harvest at 30,000 bushels. The spot price of soybeans is currently $11.37/bushel. Soybean futures are defined
George Q. Farmer grows soybeans. He estimates his October harvest at 30,000 bushels. The spot price of soybeans is currently $11.37/bushel. Soybean futures are defined as 5,000bu, $0.01/bu. November soybeans are quoted at 1137.
To fully hedge his position George should (Buy? / Sell?) How many contracts? ___?___
The basis is $___?___
A textbook Hedge will lock in an effective price of $___?___
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Introduces Quantitative Finance
Authors: Paul Wilmott
2nd edition
470319585, 470319581, 978-0470319581
