On March 1 a Commodity's Spot Price Is $60 and Its

question 13

Multiple Choice

On March 1 a commodity's spot price is $60 and its August futures price is $59.On July 1 the spot price is $64 and the August futures price is $63.50.A company entered into futures contracts on March 1 to hedge its purchase of the commodity on July 1.It closed out its position on July 1.What is the effective price (after taking account of hedging) paid by the company?

• A) $59.50
• B) $60.50
• C) $61.50
• D) $63.50

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Definitions:

Chronic Malnutrition

Long-term nutritional deficiency that leads to stunted growth, weakened immunity, and increased susceptibility to disease.

Overpopulation

A condition where an area's population exceeds the carrying capacity of its environment, leading to environmental degradation and diminished quality of life.

Infant Mortality

The death of children under the age of one year, measured as the number of deaths per 1000 live births in a given year or region.

Malnutrition

A condition resulting from not consuming enough nutrients, leading to various health problems related to undernourishment or lack of essential dietary elements.