Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Thank you for your help. IQuestions 34 through 4|] are related. 34. c. 35. The annual harvest of feed corn occurs in October but demand

Thank you for your help.

image text in transcribedimage text in transcribedimage text in transcribed
IQuestions 34 through 4|] are related. 34. c. 35. The annual harvest of feed corn occurs in October but demand is spread evenly throughout the year. Suppose monthly demand for feed corn has been estimated to he \36. With reference to question 34, what will be the prices in May, June, July, August, and September? Month May June July Aug Sept a. $5.05 $5.15 $5.25 $5.35 $5.45 b. $4.98 $5.08 $5.18 $5.28 $5.38 $4.92 $5.02 $5.12 $5.22 $5.32 d. $4.84 $4.94 $5.04 $5.14 $5.24 C. $4.76 $4.86 $4.96 $5.06 $5.16 37. With reference to the previous questions, what will be the quantity demanded for the months of October, November, December, January, February, and March? Month Oct Nov Dec Jan Feb March a. 77.01 76.69 76.37 76.05 75.73 75.41 b. 76.76 76.44 76.12 75.80 75.48 75.16 76.50 76.18 75.86 75.54 75.22 74.90 d. 76.30 75.98 75.66 75.34 75.02 74.70 C. 76.08 75.76 75.44 75.12 74.80 74.48 38. With reference to the previous questions, what will be the quantity demanded for the months of April, May, June, July, August, and September? Month Apr May June July Aug Sept a. 75.09 74.77 74.45 74.13 73.81 73.49 b. 74.84 74.52 74.20 73.88 73.56 73.24 C. 74.58 74.26 73.94 73.62 73.30 72.98 d. 74.38 74.06 73.74 73.42 73.10 72.78 74.16 73.84 73.52 73.20 72.88 72.5639. Assume in the futures market, the July corn contract is trading at $5.15 per bushel and you are a manufacturer that will need 200,000 bushels of corn in July. Based on your analysis above and assuming you are \"risk neutral", to minimize costs, you would: Buy corn in the futures market because in July, when the contract matures and corn is needed, you forecast the market price will be greater than $5.15. Sell corn in the futures market because in July, when the contract matures and corn is needed, you forecast it will trade for less than $5.15. Not buy corn in the futures market because in July, when the contract matures and corn is needed, you forecast the market price will be less than $5.15. Not sell corn in the futures market because in July, when the contract matures and corn is needed, you forecast it will trade for more than $5.15. Answers b. and d. are correct. Assume in the futures market, the July corn contract is trading at $5.15 per bushel and you are a farmer that grows corn and will have corn in storage to sell in July. Based on your analysis above and assuming you are \"risk neutral\

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Global Strategy

Authors: Mike W. Peng

5th Edition

0357512367, 978-0357512364

Students also viewed these Economics questions