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You need 70,000 bushels of corn for your production operations next month. The futures contracts on corn are based on 5,000 bushels and are currently quoted at 514 cents per bushel for delivery next month. If you want to hedge your cost, how many contracts should you purchase and what is your cost per contract? What is your profit or loss if the spot price is 520 cents per barrel next month? What is the price when its 510 cents per barrel?

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Financial Management, Finance

Category:- Financial Management
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