You would like to lock in the selling price on 55,000 bushels of wheat, which you plan to harvest and deliver to the market in September. The September futures price quote is currently 912΄6. If you write September futures contracts on your wheat, you will be guaranteed a total price of _____ for your crop. Each contract is quoted in cents and 1/8 ths of a cent per bushel with a contract size of 5,000 bushels.
A) $45,637.50
B) $502,012.50
C) $11,908.75
D) $297,700.50
E) $2,977,000.25

Question

Quizplus · Accepted Answer

The futures price is 912.75 cents per bushel (912 and 6/8). For 55,000 bushels, the total price is 55,000 * 912.75 cents = 50,201,250 cents, which is $502,012.50.

You Would Like to Lock in the Selling Price on 55,000