On April 1,2014,Button Industries Enters into an Agreement with Bows

question 35

Essay

On April 1,2014,Button Industries enters into an agreement with Bows Incorporated to lock in the price of cotton.Button agrees to purchase (and Bows agrees to sell)100,000 pounds of cotton at $1.19 per pound,six months from the date of agreement.On October 1,2014,the price of cotton is $1.17 per pound.The contract allows for net settlement.
Required:
Determine the net settlement on the forward contract.

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Definitions:

Baddeley

A reference to Alan Baddeley, a psychologist best known for his work on the model of working memory.

Maintenance Rehearsal

A cognitive process involving the repetition of information to keep it within working memory or to store it in short-term memory.

Phone Number

A sequence of digits assigned to a telephone line for the purpose of making and receiving calls.

Selective Attention

The process of focusing on a specific aspect of information while disregarding other perceivable information.