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Suppose today is May 1, 2014, and your firm produces breakfast cereal and needs 85,000 bushels of corn in July 2014 for an upcoming promotion. You would like to lock in your costs today becasue you are concerned that corn prices might rise between now and July.

Each contract is for 5,000 bushels; the settle price for July 2014 is $5.19 per bushel.

Suppose corn prices are $5.08 per bushel in July. What will your cumulative mark to market be?

(Do not round intermediate calculations. Enter your answer as a positive value if a profit or as a negative number if a loss. Round to the nearest whole number, i.e. dollar, e.g., 32)

Cumulative MTM = $

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92857270

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