You Buy One Futures Contract for 5,000 Bushels of Soybeans

question 88

Multiple Choice

You buy one futures contract for 5,000 bushels of soybeans with a settlement price of $6.92 per bushel. If the price is $7.58 per bushel at the contract expiration, what is your payoff?

• A) -$37,900
• B) -$3,300
• C) $2,130
• D) $3,300
• E) $37,900

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Definitions:

Quantity Demanded

The complete sum of a particular good or service that customers are prepared and able to buy at a given price level.

Quantity Supplied

The level of supply for a good or service that vendors are able and willing to make available at a particular price over a particular duration.

Market

A facility that enables the transaction of various goods, services, and information between purchasers and vendors.

Production Technology

Refers to the methods, equipment, and software used to produce goods and services.