How much more or less would you have earned

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Question - You expect to deliver 45,000 bushels of wheat to the market in July. Assume you hedged your position by selling futures contracts on half of your expected delivery at a price of 690. The futures contracts are based on 5,000 bushels and are priced in cents per bushel. Assume the market price turns out to be 733 when you actually deliver the wheat. How much more or less would you have earned if you had not bought the futures contracts?

Reference no: EM133183413

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