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The following questions use the table below about a grain elevator. One contract is for 5,000 bushels, 1) Is the individual concerned about price increasing

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The following questions use the table below about a grain elevator. One contract is for 5,000 bushels, 1) Is the individual concerned about price increasing or decreasing? 2) What is the initial action in the futures market: buy or sell? 3) What is the cash price paid/received by the individual later on a per unit basis? 4) Did the individual earn a profit or loss in this hedging situation? Enter profit or loss in the following blank. 5) What is the value (i.e. amount) of the profit/loss on the hedge for one contract (signs matter) on a per unit basis? 6) What is the hedged price per bushel on this transaction? 7) If the individual didn't hedge, what would have been the price paid/received for the cash commodity on a per unit basis? 8) The individual made the right decision to hedge: Yes or No

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