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Suppose you are a wheat farmer. It is September, and you intend to have 50,000 bushels of wheat harvested and ready to sell in November. The current spot market price is $2.50 per bushel, and the current December futures price of wheat is $2.75 per bushel. Assume that there are no transactions or carrying costs. Should you buy or sell wheat futures? If each wheat futures contract is for 5,000 bushels, how many contracts will you buy or sell? How much will you spend or receive in buying or selling these futures contracts

Econometrics, Economics

  • Category:- Econometrics
  • Reference No.:- M9472594

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