Harvest Fields Sold Ten September Futures Contracts on Oats

question 63

Multiple Choice

Harvest Fields sold ten September futures contracts on oats. Harvest Fields will:

• A)pay for the oats in September.
• B)take delivery of the oats in September.
• C)pay for the oats now and take delivery in September.
• D)receive payment now and deliver in September.
• E)both receive payment and deliver in September.

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Definitions:

PVGO

Present Value of Growth Opportunities; a model to estimate the portion of a company's stock price that is attributed to future growth opportunities.

Stock Price

The current price at which a particular stock can be bought or sold in the market, influenced by supply and demand, company performance, and market sentiment.

Forecast Earnings

An estimate of a company's future earnings per share over a specific period, often used by analysts to project future financial performance.

ROE

Return on Equity, a measure of the profitability of a business in relation to the equity, calculated as net income divided by shareholder's equity.