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Speculating with Futures Contracts [10 Points] After an extensive analysis of political currents in Central and South America, you conclude that coffee prices will be lower in the future. The current futures price for coffee is $2.10 and each contract is for 37,500 pounds of coffee.

(a) Would you enter a long or short futures position?

(b) Suppose that you decide to enter into a 10-contract position. What would be your profit if your analysis is correct and the futures price falls to $1.90?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92851975

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