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Now is September. Laura will sell 10,000 bushels of corns in December. In September, the December corn futures are selling for $6 per bushel. To
Now is September. Laura will sell 10,000 bushels of corns in December. In September, the December corn futures are selling for $6 per bushel. To hedge her corn price risk, she sells 10,000 bushels of December corn futures. Which of the following is CORRECT if the corn price goes down to $5.50 per bushel in December? O Laura's payoff in the spot market in December is -$55,000. O Laura's payoff in the futures market in December is -$5,000. O Laura's total payoff from both the spot market and futures market in December is $60,000. O Laura's total payoff from both the spot market and futures market in December depends on spot price.
Now is September. Laura will sell 10,000 bushels of corns in December. In September, the
December corn futures are selling for $6 per bushel. To hedge her corn price risk, she sells 10,000
bushels of December corn futures. Which of the following is CORRECT if the corn price goes down
to $5.50 per bushel in December?
O Laura's payoff in the spot market in December is -$55,000.
O Laura's payoff in the futures market in December is -$5,000.
O Laura's total payoff from both the spot market and futures market in December is $60,000.
O Laura's total payoff from both the spot market and futures market in December depends on spot price.
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