A Farmer and a Sugar Factory Enter into a Futures

question 5

Multiple Choice

A farmer and a sugar factory enter into a futures contract requiring the delivery of 4,000 tons of sugarcane to the buyer in June at a price of $30 per ton. Suppose the futures contracts for sugarcane increases to $35 per bushel the day after the farmer and the sugar factory enter into their futures contract. If the contract was settled under these conditions, the farmer will have:

• A) lost $5.
• B) lost $20,000.
• C) gained $5.
• D) gained $20,000.

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Definitions:

Unemployment Insurance

A government program that provides financial assistance to individuals who are unemployed through no fault of their own.

Spells of Unemployment

Periods during which an individual is out of work and actively seeking employment.

Non-institutionalized Population

Individuals residing within a community rather than in institutions such as prisons, nursing homes, or psychiatric hospitals.

Labor Force

The total number of people who are eligible and available to work, including both the employed and the unemployed seeking employment.