What is the risk-free price

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Reference no: EM132953746

Hedging using futuresharvest and sale as 150,000 pounds of orange juice in 3

Suppose a farmer is expecting that her crop of oranges will be ready for months time. Suppose each orange juice futures contract is for 15,000 pounds of orange juice, and the current futures price is F0=118.65 cents-per-pound.

Assuming that the farmer has enough cash liquidity to fund any margin calls, what is the risk-free price that she can guarantee herself.

Please submit your answer in cents-per-pound rounded to two decimal places. So for example, if your answer is 123.456, then you should submit an answer of 123.47.

Reference no: EM132953746

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