A corn futures contract closed yesterday at a price of $3.90 a bushel. The maximum daily price range is $0.70 and the daily price limit is $0.35. Therefore, the
A) highest closing price for today is $4.25 a bushel.
B) most the price can fluctuate today is $0.35 a bushel.
C) minimum change in the price today is $0.35 a bushel.
D) lowest closing price for today is $3.55 a bushel.

Question

Quizplus · Accepted Answer

The maximum daily price range is $0.70, which means that the highest price for today could be $3.90 + $0.70 = $4.60 a bushel and the lowest price could be $3.90 - $0.70 = $3.20 a bushel. However, the daily price limit is $0.35, which means that the price cannot increase or decrease more than $0.35 from the previous day's closing price. Therefore, the highest closing price for today is $3.90 + $0.35 = $4.25 and the lowest closing price for today is $3.90 - $0.35 = $3.55. The correct answer is D, which represents the lowest possible closing price for today.

A Corn Futures Contract Closed Yesterday at a Price of $3.90