Q10.Suppose that youhavefullyhedgedyour cattle on feedby tradingJune 2020CME live cattle futures contract. You placed hedge on 02January 2020by trading(selling or purchasing)NFC= Qc/Qfc(full-hedging)number of December futures contract(fill the blank spaces in the following table).You lifted hedge on02 April 2020by trading (selling or purchasing) the same number of December futures contract(fill the blank spaces in the following table). The cash and futures prices during the time of placing and lifting hedge are listed in the following table.By filling the blank spaces in the table, show the hedging strategy and calculate the revenue from selling the live animals in the local cash market, gain/loss from the futures position, total revenue, and net realized price per pound of live animal.(10points)

Date/Action

Cash Market

Futures Market

Jan 02, 2020

Action

CP = 106.10 cents/lb.

FP =114.20 cents/lb.

_______ _____Jun 2020CME LC contracts@________ cents/lb.

June02, 2020

Action

CP = 110.90 cents/lb.

FP = 116.40 cents/lb.

________ 1,000 cattle (1,200,000 lb.) @ ________

_______ _____Jun 2020CME LC contracts@________ cents/lb.

Gain / Loss =

Return from Cash Market

=

Return from Futures Market

=

Net Return from Cash and Futures Markets

=

Net realizedprice of live cattle (cents/lb.)

=