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Suppose you sold one contract of Corn for $4 per bushel (5,000 bushel per contract) for delivery in three months time. Yesterdays price of corn
Suppose you sold one contract of Corn for $4 per bushel (5,000 bushel per contract) for delivery in three months time. Yesterdays price of corn was $4.50 (note: already marked-to-market). Today the spot price of corn is $4.55. If the futures contract is marked to market on a daily basis as the price changes, what is your cash flow per bushel of corn at the end of the day today? (ignore contract size)
A) $0
B) -$0.05
C) $0.55
D) $0.05
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