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In six months, a cereal company plans to sell 30,000 boxes of Corn Crisps for $4.50 per box and will need to buy 15,000 bushels
In six months, a cereal company plans to sell 30,000 boxes of Corn Crisps for $4.50 per box and will need to buy 15,000 bushels of corn to do so. In doing so, it also incurs non-corn costs of $41,000. The current spot price of corn is $5.90 per bushel, and the six-month forward price is $6.14. The company will hedge by buying corn forward. What total profit would be earned if the market price of corn in six months is $5.30, $5.70, $6.10, and $6.50, respectively?
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