Assume Corn Spot Prices Over the Next 3 Years Are

question 22

Multiple Choice

Assume corn spot prices over the next 3 years are $2.20, $2.35, and $2.28, respectively. The original swap price was $2.30 per bushel. If cash settlement occurs, what transaction will the counter-party make in year 2 on a 5,000-bushel swap agreement?

• A) $250 payment
• B) $250 receipt
• C) $100 payment
• D) $100 receipt

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Definitions:

Tender Offer

A public, open offer or invitation (usually made by a company) to all shareholders to sell their shares at a particular price during a specified time.

Proxy Contest

A competition for the control or influence over a company by requiring shareholders to vote by proxy.

Shareholder Votes

The process by which shareholders exercise their right to make decisions on corporate matters, typically exercised during annual general meetings.