Suppose a farmer has all his wealth in wheat and owns 1,000,000 bushels of it. Assume further that the cash price (the spot price or the wheat price in the wheat market) is $5 per bushel today, and the risk-free interest rate is 5% p.a. a) If the wheat price drops to $3 per bushel tomorrow, what will be his wealth? b) Suppose the August futures contract matures in exactly 3 months from today, what should be the futures price today and tomorrow? Ignore storage costs and benefits from holding wheat in this case. c) If he wants to lock in a selling price today, should he be long or short? If the contract size is 5,000 bushels, how many contracts should he get into? What will be his wealth tomorrow? Suppose a farmer has all his wealth in wheat and owns 1,000,000 bushels of it. Assume further that the cash price (the spot price or the wheat price in the wheat market) is $5 per bushel today, and the risk-free interest rate is 5% p.a. a) If the wheat price drops to $3 per bushel tomorrow, what will be his wealth? b) Suppose the August futures contract matures in exactly 3 months from today, what should be the futures price today and tomorrow? Ignore storage costs and benefits from holding wheat in this case. c) If he wants to lock in a selling price today, should he be long or short? If the contract size is 5,000 bushels, how many contracts should he get into? What will be his wealth tomorrow