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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Foundations of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
10th Canadian edition
1259261018, 1259261015, 978-1259024979
