Suppose that you recommend the cattle feeder to hedge her cash position by trading the risk minimizing number of December $2023$ CME live cattle futures contract. Following your advice, on $09$ April $2023,$ the cattle feeder placed hedge by selling the risk$-$minimizing number $($NFC$*,$ as calculated using the econometric hedge ratio$)$ of December $2023$ CME Live Cattle futures contract at $192\mathrm{.}35$ cents per pound. The local cash price for live cattle at the time of placing hedge was $183\mathrm{.}00$ cents per pound. Suppose that, on $28$ October $2023,$ the closing price for fed cattle in the local cash market appears to be $179\mathrm{.}40$ cents per pound and the December $2023$ live cattle futures settlement price appears to be $183\mathrm{.}15$ cents per pound. Show the hedging strategy in the following table 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. $(10$ points$)$

Date$/$Action Cash Market Futures Market

$09$ April $2023$

Action CP $=183\mathrm{.}00$ cents$/$lb$.$ FP $=192\mathrm{.}35$ cents$/$lb$.$

$\_\_\_\_\_\_\_\_\_$ Dec. $2023$ CME LC contracts @ $\_\_\_\_\_$ cents$/$lb$.$

$28$ Oct. $2023$

Action CP $=179\mathrm{.}40$ cents$/$lb$.$ FP $=183\mathrm{.}15$ cents$/$lb$.$

$\_\_\_\_\_\_1,000$ cattle $(1,200,000$ lb$.)$ @ $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$ Dec. $2023$ CME LC contracts @ $\_\_\_\_\_\_$ cents$/$lb$.$

Gain $/$ Loss $=9\mathrm{.}2$ cents per pound

Return from Cash Market

Return from Futures Market

Net Return from Cash and Futures Markets

Net realized price of live cattle $($cents$/$lb$.)$