Question 1
Farmer Jones sold wheat futures contracts at a price of $3 per bushel. She will profit from her futures position if
◦ the futures price goes up.
◦ the futures price goes down.
Question 2
Krusty Burger requires pork for producing its famous Meat-Flavored Sandwich. Frozen Pork Bellies futures contracts trade on the CME. Each contract calls for the delivery of 40,000 lbs. of USDA-inspected Pork Bellies. Krusty requires 40,000lbs on July 10. Today the spot price of pork bellies is $1.177 per pound and the July futures contract is trading for a price of $1.2055/lbs. Assume Krusty enters the appropriate position in July futures contracts to hedge its price risk. On July 10th it buys its pork from local pig farmers at $1.1655/lbs. and closes out the futures position. Unfortunately, the pork bellies futures price had not achieved convergence on the day the position is closed-the futures price is $1.1700 when Krusty Burger closes its position. What is the cost per pound of pork? The purchase cost includes the cumulative profit from the futures transactions.
◦ $1.1255
◦ $1.1655
◦ $1.1770
◦ $1.2010
Mercalli Intensity Maps of Two Famous Bay Area Earthquakes
This iconic photograph by Dorothea Lange, entitled “Migrant Mother,” has become a famous ...
Delicious Burger
Color Is Not Always an Indicator of Whether Meat Is Thoroughly Cooked
Typical sandwich bar
A basic strategy for producing a knockout mouse