1. On May 1 a Kansas farmer entered into a short futures contract to sell 100,000 bushels of wheat for 425 cents per bushel by entering into a futures contract that matures on October 3 (5 points)

1. On September 30^th the farmer closed out her contract by taking a long futures position at a price of 405 cents per bushel and sells 125,000 bushels of wheat (the farmer had a larger crop than expected) in the spot market for 390 cents per bushel. Calculate the effective price received by the farmer (show the gain or loss on the futures contract and the price paid in the spot market).