1. On 31stJanuary 2012, a sheep farmer became concerned that by the time her 200 bale greasy wool (25,000 kg) crop was ready for delivery in April 2012 that the price would fall below $11.80 per kg - her break-even price. Given that one greasy wool contract is for 2,500 kg, show how the farmer can 'lock in' a profit for her business by entering and subsequently reversing a futures market position, if the April spot price fell to $11.50 per kg.

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