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Please SHOW YOUR WORK On October 1 , an elevator who holds soybeans, fears its price decrease due to reports of big crop in Brazil.
Please SHOW YOUR WORK On October an elevator who holds soybeans, fears its price decrease due to reports of big crop in Brazil. He did the following calculation and trades in both the cash and futures markets on October and May Please fill in blanks in the table. Assume there is no basis risk and the basis did not change in the whole process. A What is the forward price? B What is the expected profit margin? tablectSell Mav FuturesSell Cash@$Buy M C What is futures price on May th D What is the gain or loss on futures market result? E What is the gain or loss on cash market result? F What is the realized price or net selling price G What is the overall profit?
Please SHOW YOUR WORK
On October an elevator who holds soybeans, fears its price decrease due to reports of big crop in Brazil. He did the following calculation and trades in both the cash and futures markets on October and May Please fill in blanks in the table. Assume there is no basis risk and the basis did not change in the whole process.
A What is the forward price?
B What is the expected profit margin?
tablectSell Mav FuturesSell Cash@$Buy M
C What is futures price on May th
D What is the gain or loss on futures market result?
E What is the gain or loss on cash market result?
F What is the realized price or net selling price
G What is the overall profit?
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