You Would Like to Lock in the Selling Price on 50,000

question 14

Multiple Choice

You would like to lock in the selling price on 50,000 bushels of wheat, which you plan to harvest and deliver to the market in September. The September futures price quote is currently 899΄4. If you write September futures contracts on your wheat, you will be guaranteed a total price of ________ for your crop. Each contract is quoted in cents and 1/8ths of a cent per bushel with a contract size of 5,000 bushels.

• A)$45,637.50
• B)$541,650.00
• C)$449,750.00
• D)$297,700.50
• E)$2,977,000.25

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Definitions:

Residential Properties

Properties designed for people to live in, including houses, apartments, condos, and townhomes.

Permutation Test

A nonparametric statistical test method used to determine if two or more samples come from the same distribution.

P-value

A statistical measure indicating the probability of observing test results at least as extreme as those actually observed, assuming that the null hypothesis is true.

Standard Deviation

A measure that indicates the amount of variation or dispersion of a set of values from the mean (average) of that set.