In June 2020, a sheep farmer became concerned that by the time she sells her crop of 25,000 kg of wool in November 2020 that the price would fall from its current $11.50 per kg to less than her $10.00 per kg break-even price.One wool contract is for 2,500 kg, and June, September and December wool futures prices are $10.55, $10.90 and $10.70 respectively.

Use the table below to show how the sheep farmer can 'lock in' a profit for her business by entering and subsequently reversing a futures market position, if in November, the spot and December futures prices increase to $11.10 per kg and $11.20 per kg respectively.

Calculate:

i) The profit on futures trading.

ii) The overall (hedged) revenue from wool.

iii) The effective price per killogram.