You Need to Purchase Apples 1-Month from Now and Would

question 60

Multiple Choice

You need to purchase apples 1-month from now and would like to hedge against price movements in apples.The spot price for apples is $5 a bushel and the risk-free rate is 10%.What is the 1-month forward price for a bushel of apples?

• A) $4.96
• B) $5.00
• C) $5.04
• D) $5.50

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Definitions:

Emotionally Healthy

A state of well-being in which an individual recognizes their own abilities, can cope with normal stresses, work productively, and contribute to their community.

Erikson

Erik Erikson was a developmental psychologist and psychoanalyst known for his theory on the psychosocial development of human beings.

Initiative V. Guilt

A stage in Erikson's psychosocial development theory where children (ages 3-5) develop initiative by planning and undertaking activities or alternatively, may feel guilt over their needs and desires.

Social Competence

Refers to the ability of an individual to interact effectively with others in a social context, including effective communication and understanding social norms.