Today, Sarah purchased $2$ July $2024$ coffee futures contracts. Why would she do this? $($Please select the most complete answer choice below based on what we learned in class$).$

I.

Sarah could be a day trader. In this case, she thinks the market will go down. By purchasing the two futures contracts, she hopes that the value of the contracts will decrease so she can sell them later and make a profit. Sarah could also be a coffee importer. In this case, she needs $75,000$ pounds of coffee in July of $2024.$ By purchasing the two contracts today, she is locking in a price today. If she lets the contracts expire, the coffee futures exchange will have to deliver $75,000$ pounds of coffee to Sarah at the price at which Sarah originally purchased the contracts for.

II$.$

Sarah could be a day trader. In this case, she thinks the market will go up$.$ By purchasing the two futures contracts today, she hopes that the value of the contracts will increase so she can sell them later and make a profit. Sarah could also be a coffee exporter. In this case, she will have $75,000$ pounds of coffee ready to sell in July of $2024.$ By purchasing the two contracts today, she is locking in a price today that she can deliver to the coffee exchange at a later date. If she lets the contracts expire, she can deliver $75,000$ pounds of coffee to the coffee futures exchange at the price at which Sarah originally purchased the contract for.

III.

Sarah could be a day trader. In this case, she thinks the market will go up$.$ By purchasing the two futures contracts today, she hopes that the value of the contracts will increase so she can sell them later and make a profit. Sarah could also be a coffee importer. In this case, she needs $75,000$ pounds of coffee in July of $2024.$ By purchasing the two contracts today, she is locking in a price today for coffee that she can take delivery of in the future. If she lets the contracts expire, the coffee futures exchange will have to deliver $75,000$ pounds of coffee to Sarah at the price at which Sarah originally purchased the contract for.

IV$.$

Sarah could be a day trader. In this case, she thinks the market will go up$.$ By purchasing the two futures contracts today, she hopes that the value of the contracts will increase. This way, if she lets the contracts expire, she has the option of selling the contracts to someone at a higher price.