The T-Shirt Factory Purchased 12 Futures Contracts on Cotton at a Quoted

question 33

Multiple Choice

The T-Shirt Factory purchased 12 futures contracts on cotton at a quoted price of 55.50 as a hedge against its inventory needs. At the time it actually needed the cotton, the spot price was 56.10. Cotton futures are based on 50,000 pounds and quoted in cents per pound. How much did the Shirt Factory save by hedging cotton?

• A)$90
• B)$560
• C)$1,280
• D)$2,400
• E)$3,600

Analyze various perspectives on the constitutional relationship between the American colonies and Great Britain.

Assess the impact and effectiveness of economic boycotts as a form of protest against British policies.

Understand the causes and significance of regional resistance movements, such as the land riots and Regulator movements.

Recognize the purpose and outcomes of key meetings and congresses, including the First Continental Congress.

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Definitions:

iPads

A line of tablet computers designed and marketed by Apple Inc., which run the iOS and iPadOS mobile operating systems.

Laptop

A portable personal computer with a screen and keyboard, designed for mobile use and small enough to rest on the user's lap.

Income Effect

Adjustments in the income of an individual or the broader economy and the consequent effects on how much of a good or service is desired.

Law of Diminishing

refers to the principle that as one consumes more of a good, the marginal utility (or satisfaction) obtained from consuming an additional unit decreases.