Suppose your firm produces breakfast cereal and needs 165,000 bushels of corn in December 2020 for an upcoming promotion. You would like to lock in your costs today because you are concerned that corn prices might rise between now and December.
Use Table 23. 1.
a. What total cost would you effectively be locking in based on the closing price of the day? (Do not round intermediate calculations and round your answer to 2 decimal places, e. G. , 32. 16. )
b. Suppose corn prices are $3. 23 per bushel in December. What is the profit or loss on your futures position? (Enter your answer as a positive number. Do not round intermediate calculations and round your answer to 2 decimal places, e. G. , 32. 16. )
