After an extensive analysis of political currents

Reference no: EM13692506

After an extensive analysis of political currents in Central and South America, you conclude that coffee prices will be lower in the future. The current futures price for coffee is $2.10 and each contract is for 37,500 pounds of coffee.

a) Would you enter a long or short futures position?

b) Suppose that you decide to enter into a 10-contract position. What would be your profit if your analysis is correct and the futures price falls to $1.90?

Reference no: EM13692506

Questions Cloud

What will happen to your margin account : The current price of gold is $1,800 an ounce, and the current futures price is 1,850 an ounce. Suppose you expect the price of gold to rise and you enter a long position into a future contract to buy gold.

Economy has consumption function-equilibrium real gdp : An economy has a consumption function of C=10+.8Y, investment of 6, government expenditure of 10, exports of 10, and an import function of M=.1Y. What i equilibrium real GDP?

Assume the economy is initially in a short-run equilibrium : Assume the economy is initially in a short-run equilibrium at a level of output below full employment. Use the IS-LM model to graphically illustrate: 1. how the economy will adjust in the long-run if the no-policy action is taken. 2. if fiscal policy..

What is the multiplier for this economy : An economy has a consumption function of C= 10 + .8Y, investment of 6, government expenditure of 10, exports of 10, and an import function of M=.1Y What is the multiplier for this economy?

After an extensive analysis of political currents : After an extensive analysis of political currents in Central and South America, you conclude that coffee prices will be lower in the future. The current futures price for coffee is $2.10 and each contract is for 37,500 pounds of coffee.

Consider toms labor supply decision : Consider Toms labor supply decision. Tom can earn $15 per hour, but he faces a 20% tax rate and pays $4 per hour in child care expenses for each hour he works. What is Tom's 'real' hourly wage rate?

Expected payment based on the futures exchange rate : A portfolio manager owns a bond worth £ 2,000,000 that will mature in one year. The pound is currently worth $ 1.65, and the one- year future price is $ 1.61. If the value of the pound were to fall, the portfolio manager would sustain a loss.

Pursued export-oriented development strategies : Taiwan and Jamaica are both islands that have pursued export-oriented development strategies, but Jamaica has experienced increases in unemployment and poverty, while Taiwan has experienced decreases. How might you explain this?

After a policy of import substitution has begun : Normal 0 false false false EN-US X-NONE X-NONE MicrosoftInternetExplorer4 ..

User Account

All Pages