1) Josh Rink bought one July cotton contract at= $0.54 a pound and he just sold it at= $0.58 a pound. How much profit did he build? Compute his return on invested capital if he had to put up a= $1,260 initial deposit?
2) Mad cow disease is in a neighbouring country, and you consider that feeder cattle prices will increase dramatically in next few months as buyers of cattle shift to U.S. suppliers. Someone else considers that prices will fall in next few months as people will be afraid to eat beef. You go to CME and determine that feeder cattle futures for delivery in April are presently quoted at 88.8. Contract size is 50,000 lbs. What is the market value of 1 contract?