Questions
Questions

fin_412_120258_251367 Test 1 in class

Single choice

A farmer is has harvested their corn and the current spot price is $4.25 per bushel. They decide to short one March corn future at $4.50. Which of the following is true

Options
A.They have locked in the price at which they can sell their harvest in March so they are hedged
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Step-by-Step Analysis
In this scenario, the farmer takes a short position in a March corn futures contract at 4.50 while the current spot price is 4.25. Option: 'They have locked in the price at which they can sell their harvest in March so they are hedged.' - This statement describes a classic futures h......Login to view full explanation

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