A Farmer Stores His Fall Harvest of Corn and Sells

question 37

Multiple Choice

A farmer stores his fall harvest of corn and sells corn futures for March delivery at $2.50 per bushel.In March the spot price of corn is $2.20 per bushel.Which of the following is correct?

• A) The farmer is obligated to deliver corn to the futures buyer at $2.20.
• B) The farmer has locked in an effective price of $2.50 per bushel.
• C) The farmer would have been better off without the futures contact.
• D) The farmer will receive $4.70 per bushel, which more than doubles the profit obtained without futures.

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Definitions:

Paternity

Refers to the state of being a father or relating to fatherhood.

HSV-2

Herpes Simplex Virus type 2, a sexually transmitted virus that primarily causes genital herpes.

FTA-ABS

The Fluorescent Treponemal Antibody Absorption test, a specific blood test for detecting antibodies to the bacterium Treponema pallidum, the causative agent of syphilis.

Trichomoniasis

A sexually transmitted infection caused by the parasite Trichomonas vaginalis.