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Wild Valley Co (WVC) expects to harvest 100,000 bushels of soybeans in September. WFC is concerned about the possibility of price fluctuations between now and
Wild Valley Co (WVC) expects to harvest 100,000 bushels of soybeans in September. WFC is concerned about the possibility of price fluctuations between now and September. The futures price for September soybeans is $9 per bushel, and the relevant contract calls for 10,000 bushels.
a) What action should WVC take to lock in the $9 price? b) If the price of soybeans actually turns out to be $8. Evaluate WVC gains and losses. c) If the price of soybeans turns out to be $13. Evaluate WVC gains and losses.
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