In October, Rye Company, a producer of a grain$-$based product, determined that it would need $10,000$ bushels of grain near the end of February of the following year. Rye Company expects the current price of $$4$ per bushel of grain to change and does not want to assume the risk of such market price changes. As a result, Rye Company enters into a futures contract with Chicago Clearing House Inc. $($CCH$)$ to hedge the risk of market price changes of grain. The cost of the cash $$ow hedge $($futures contract$)$ is zero. The futures contract provides that Rye Company purchases the grain at the date needed at market price, but CCH must pay Rye Company any di$$erences above $$4/$bushel while Rye Company pays to CCH any di$$erences below $$4/$bushel$.$ Assume that the market price of grain is $$4\mathrm{.}20/$bushel on December $31$ and that Rye Company settles the futures contract with CCH and purchases the $10,000$ bushels on February $20$ of the following year in the market for $$4\mathrm{.}30/$bushel$.$