The following questions use the table below about an end user needing soybean oil. One contract is for 60,000 lbs.

	Now	Later
Cash Soybean Oil Market	$0.2760/lb	$0.2610/lb
Futures Soybean Oil Market	$0.2991/lb	$0.2841/lb

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?

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)?

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?

8) The individual made the right decision to hedge: Yes or No.

9) Did the basis change: Yes or No.