What is gails total profit on her futures contract

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Reference no: EM132008525

Suppose Gail buys a futures contract in oats from Sam at a price of $1.98 a bushel. An oats futures is for 5000 bushels.

1. If the price of oats at expiration is $1.86 per bushel, what is Gail's total profit on her futures contract? (Total profit is NOT profit per bushel.) (Also, assume there is no marking to market, even though in reality all futures contracts are marked to market.)

2. Instead of the price of oats at expiration being $1.86 per bushel, assume it is $2.22 per bushel. Now what is Gail's total profit on her futures contract?

Reference no: EM132008525

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