Assume You Write a Futures Contract on Corn at $4

question 38

Multiple Choice

Assume you write a futures contract on corn at $4.05 per bushel.Over the next 5 trading days the contract settled at $4.07,$4.05,$4.04,$4.02,and $4.04.You then decide to reverse your position in the futures market on the fifth day at close.What is the net amount you receive on this contract per bushel?

• A)$4.04
• B)$4.05
• C)$4.07
• D)$4.02
• E)$4.06

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Definitions:

Sigma Bonds

The strongest type of covalent chemical bond, formed by the direct overlap of atomic orbitals, with the electrons shared in an area centered on a line running between the nuclei.

Pi Bonds

Covalent chemical bonds formed by the side-to-side overlap of atomic orbitals, allowing for electron sharing in double and triple bonds.

Hybridization

A concept in chemistry that describes the mixing of atomic orbitals into new hybrid orbitals, suitable for the pairing of electrons to form chemical bonds.

Atom

The basic unit of a chemical element, consisting of a nucleus of protons and neutrons, with electrons orbiting this nucleus.