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The price for a six-month wheat futures contract is $2.70 per bushel. If a farmer decides to hedge her 20,000 bushels of wheat with the
The price for a six-month wheat futures contract is $2.70 per bushel. If a farmer decides to hedge her 20,000 bushels of wheat with the futures contract, what is her profit or loss if spot prices are $2.65 or $2.80 when she sells her crop in 6 months? Her total costs, which are associated with producing wheat, are $53,000. A. $1,000 gain or $1,000 loss B. $0 gain or $3,000 gain C. $0 loss or $3,000 loss D. $1,000 gain or $1,000 gain
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