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Suppose that in the 5 days following a farmer's sale of September wheat futures at a futures price of $10.51 the futures price is: Day
Suppose that in the 5 days following a farmer's sale of September wheat futures at a futures price of $10.51 the futures price is: Day 1 2 3 4 5 Price $10.51 $10.58 $9.60 $9.54 $10.14 At the end of day 5 the farmer decides to quit wheat farming and buys back his futures contract. (Hint: Contract size = 5,000 bushels) What payments are made between the farmer and the exchange on each day? (Leave no cells blank - be certain to enter "O" wherever required. Negative amounts should be indicated by a minus sign. Do not round intermediate calculations.) Payments $ a. Day 1 Day b.2 c. Day 3 d. Day 4 Day 2.5 What is the total payment over the 5 days? (Do not round intermediate calculations.) Total payment $ Would the total payment be any different if the contract was not marked to market? Yes No Suppose that in the 5 days following a farmer's sale of September wheat futures at a futures price of $10.51 the futures price is: Day 1 2 3 4 5 Price $10.51 $10.58 $9.60 $9.54 $10.14 At the end of day 5 the farmer decides to quit wheat farming and buys back his futures contract. (Hint: Contract size = 5,000 bushels) What payments are made between the farmer and the exchange on each day? (Leave no cells blank - be certain to enter "O" wherever required. Negative amounts should be indicated by a minus sign. Do not round intermediate calculations.) Payments $ a. Day 1 Day b.2 c. Day 3 d. Day 4 Day 2.5 What is the total payment over the 5 days? (Do not round intermediate calculations.) Total payment $ Would the total payment be any different if the contract was not marked to market? Yes No
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