A Soybean Farmer Anticipates the Harvest of 10,000 Bushels but Is

question 75

Essay

A soybean farmer anticipates the harvest of 10,000 bushels but is concerned about the spot price that may exist at that time.He therefore sells two futures contracts (5,000 bushels each,@ $5.75 per bushel).Unfortunately,the farmer was overly pessimistic,and the spot price at contract expiration is $6.00 per bushel.Ignoring the premium paid,and making the simplifying assumption that the contract was only held for one "day," show the farmer's financial results of hedging.

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Definitions:

Karyotype

A complete picture of an individual’s chromosomes, used to look for abnormalities.

Allele Typing

The process of determining the variations of genes at specific loci in the DNA sequence, used in genetic research and forensics.

Cystic Fibrosis

A genetic disorder that affects mostly the lungs, but also the pancreas, liver, kidneys, and intestine, leading to severe respiratory and digestive problems.

Lethal Genetic Defect

A genetic mutation that is directly responsible for causing death, often before birth.