ACCT 2230 Chapter Notes - Chapter 1-5: Softcard, Futures Exchange, Call Option
3 Apr 2015
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Commodity hedged corn: corn farmer looking to reduce risk by hedging corn on the futures market, rather than speculating to make a profit. On february 30th i went short for may futures at a price of . 15. On april 1st, cash price for guelph corn was. . 46 and the exchange rate was sh. 74u. s/, resulting in a net selling price of. . 96, and a profit on the futures market of ,500. Futures speculation crude oil brent: decided to invest in oil because of the large crash that occurred late december early this year. I assumed the price would increase back towards equilibrium, so on january 15th i invested in one contract of march crude oil at a price of . 54. I then offset and sold on february 13 at a price of . 93 to earn a gain on the futures of . 39 per gallon, or ,390 total profit in us dollars.
