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123isme 123isme
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3 years ago
Ray Kinsella sold 20 wheat futures contracts in May. The contracts are for November delivery at a price of $5.3525/bu. Ray sold the contracts to protect against a drop in wheat prices. It is now November and wheat prices have fallen considerably to $3.00/bu. To complete the hedge transaction, Ray can

I. Deliver 100,000bu of wheat to Chicago.
II. Buy 20 November wheat contracts.
III. Do nothing and let the futures contract expire.


▸ I

▸ II

▸ III

▸ I or II
Textbook 
Corporate Finance Online

Corporate Finance Online


Edition: 2nd
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Hellish L.Hellish L.
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3 years ago
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