A farmer sells futures contracts at a price of $2.75 per bushel. The spot price of corn is $2.55 at contract expiration. The farmer harvested 12,500 bushels of corn and sold futures contracts on 10,000 bushels of corn.
-What are the farmer's proceeds from the sale of corn?
A) $27,500
B) $31,875
C) $33,875
D) $35,950

Question

Quizplus · Accepted Answer

The farmer sells 10,000 bushels at the futures price of $2.75, earning $27,500. The remaining 2,500 bushels are sold at the spot price of $2.55, earning $6,375. Total proceeds are $27,500 + $6,375 = $33,875.

A Farmer Sells Futures Contracts at a Price of $2