You Bought One Soybean Future Contract at $5

question 27

Multiple Choice

You bought one soybean future contract at $5.13 per bushel. What would be your profit (loss) at maturity if the wheat spot price at that time were $5.26 per bushel? Assume the contract size is 5,000 bushels and there are no transactions costs.

• A) $65 profit
• B) $650 profit
• C) $650 loss
• D) $65 loss

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Definitions:

Trade Deficit

A situation where a country's imports exceed its exports during a specific period, leading to a net outflow of domestic currency to foreign markets.

Net Exports

The value of a country's total exports minus its total imports; a measure of a nation's foreign trade balance.

Exports

Goods or services produced in one country and sold to buyers in a foreign country.

Adam Smith

An 18th-century Scottish economist and philosopher, best known for his theories on free market economics and the 'invisible hand' concept.