Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Hason Feedlot Ltd. used the commodity futures market to hedge an anticipated mid- October, 200-tonne barley purchase. On April 15, November barley futures were
Hason Feedlot Ltd. used the commodity futures market to hedge an anticipated mid- October, 200-tonne barley purchase. On April 15, November barley futures were trading at $247 per tonne. The hedge was placed on April 15. The feedlot anticipated a $15 basis under at the time of the mid-October cash purchase. October 15, 2019 The cash grain was purchased. November barley futures were trading at $215 per tonne. The cash price was $183.72 per tonne. The FCM fee was $1 per tonne. Show the futures and cash transactions. Calculated the net purchase price for the hedged barley. Also calculate the total amount received from this transaction.
Step by Step Solution
★★★★★
3.33 Rating (165 Votes )
There are 3 Steps involved in it
Step: 1
Futures transaction Purchase of 200 tonnes of November barley futures at 247 per tonne ...Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started