How Does a Soybean Farmer Lock in a Price of $14.40

question 38

Multiple Choice

How does a soybean farmer lock in a price of $14.40 per bushel when the cash price at harvest is only $14?

• A) Profit in futures market to offset loss in cash market by selling futures contracts at $14.40/bushel.
• B) Break even in both markets by buying a futures contract at $14.40/bushel.
• C) Profit in cash market to offset loss in futures market by buying futures contract at $14.40/bushel.
• D)Break even in both markets by selling a futures contract at $14.40/bushel.

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Definitions:

UCC Provisions

Specific clauses or requirements outlined in the Uniform Commercial Code that govern particular aspects of commercial transactions.

Remedies Available

The range of judicial or contractual measures available for addressing breaches of contract or enforcing rights.

Voidable Title

A legal state where a transaction or ownership of property can be invalidated by one party if fraud, misrepresentation, or other irregularities are discovered.

Buyer Receives

In a transaction, when the buyer takes possession or ownership of the purchased goods.