Business, 06.05.2020 06:19 indikanna

One orange juice futures contract is on 15,000 pounds of frozen concentrate. Suppose that in September 2016 you sell a March 2018 orange juice futures contract for 120 cents per pound. The futures price is 140 cents in December 2016 and 110 cents in December 2017. You close out the position at 125 cents per pound in February 2018.

A. What is your gain or loss in December 2016?

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Answer from: korban23

The company takes a loss of $3,000 in December 2016.

Explanation:

A future contract is the contract between two parties (sellers and buyers), in which the sellers agree to sell goods to the buyers at a specific future date, at specific future price and the buyers are obliged to execute the contract.

Gain or loss on the sale = Future contract concentrate x (Future price 2016 - Orange juice contract price)

Gain or loss on the sale = 15,000 pounds x ($1.4 - $1.2)

Gain or loss on the sale = 15,000 pounds x 0.2

The company takes a loss of $3,000 in December 2016. Same method applies to December 2017 - only substitute the future price 2016 to 2017, every other thing remains the same.

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$527.7.if the following was the question $527.7 is the answer.students who are trying to raise funds have an agreement with a local pizza chain. the chain has agreed to sell them pizzas at a discount, which the students can then resell to families in the local community for a profit. it is expected that of the 500 families in the community, at most 70% will buy pizza. based on a survey of their personal preferences, the students believe that they should order no more than 120 cheese pizzas, no more than 150 pepperoni pizzas, and no more than 100 vegetarian pizzas. they also want to make sure that at least 20% of the total pizzas are cheese and at least 50% of the pizzas are pepperoni. they make a profit of $1.45, $1.75, and $1.98, respectively, for each cheese, pepperoni, and vegetarian pizza they resell. how many pizzas of each type should they buy?

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One orange juice futures contract is on 15,000 pounds of frozen concentrate. Suppose that in Septemb...

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