Question
Suppose that in the 5 days following a farmers sale of December wheat futures at a futures price of $9.22, the futures price is: Day
Suppose that in the 5 days following a farmers sale of December wheat futures at a futures price of $9.22, the futures price is:
Day | 1 | 2 | 3 | 4 | 5 | ||||||||||
Price | $ | 9.22 | $ | 9.28 | $ | 9.09 | $ | 8.89 | $ | 8.99 | |||||
At the end of day 5, the farmer decides to quit wheat farming and buys back his futures contract. (Hint: Contract size = 8,200 bushels)
1. What payments are made between the farmer and the exchange on each day? (Leave no cells blank - be certain to enter "0" wherever required. Negative amounts should be indicated by a minus sign. Do not round intermediate calculations.)
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2. What is the total payment over the 5 days? (Do not round intermediate calculations.)
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