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

Net proceeds = (2.75 × 10,000) + (2.55 × 2,500) = 33,875

A Farmer Sells Futures Contracts at a Price of $2