Practice problem Question

25. Determine the basis for the May 2022 contract if a trader's position is closed out on February 18th. The spot price of Copper was $4.3445 per pound on January 10th and $4.5195 per pound on February 18th. Each contract is for 25,000 pounds. All prices are in US dollars and cents per pound. Contract Maturity January 10th February 18th Futures Price Futures Prices March 2022 $4.3515 $4.5185 May 2022 $4.3500 $4.5265 a. -$0.007 b. $0.008 c. $0.1765 d. -$0.167 e. $0.007 26. Suppose Christian entered into a short position in Corn (May 2022 contract) on January 28, 2022. The price at that time was 633.75 US cents per bushel. On Feburary 3rd, the price was 617.25 US cents per bushel. Each contract is for 5,000 bushels. If Christian has six contracts, what was his total gain/loss if the position was closed out on February 18, 2022 when the price was 653 US cents per bushel. a. $577,500 b. -$495,000 c. $41,250 d. -$96,250 -$577,500 e