Assume you write a futures contract on corn at $3.74 per bushel.Over the next 5 days the contract settles at $3.68,$3.71,$3.67,$3.64,and $3.61.Before you can reverse your position in the futures market you are notified to complete delivery on Day 5.What will you receive on delivery per bushel and what is the net amount per bushel you receive in total?
A)$3.74; −$.13
B)$3.74; $.13
C)$3.64; $3.74
D)$3.61; $3.61
E)$3.61; $3.74

Question

Quizplus · Accepted Answer

You will receive the final settlement price of $3.61 per bushel on delivery. However, since you initially wrote the contract at $3.74, you effectively receive $3.74 per bushel in total due to the initial contract price.

Assume You Write a Futures Contract on Corn at $3