Jarvis is a coffee farmer who wants to hedge his entire coffee crop that will be harvested by September. The December coffee contract (which consists of 37,500 pounds of coffee) is trading at $2.00 per pound, which the farmer views as a profitable price. To hedge the entire crop, which is expected to weigh 150,000 pounds, at the best price, Jarvis should:

Answers

Answer 1

Answer: Sell four December coffee future contracts at $2.00 per pound

Explanation:

Based on the scenario in the question, the number of contracts that is required for hedging the entire crop will be gotten by dividing the total number of crops by the pounds that are available in one contract. This will be:

= 150,000/37,500

= 4 contracts

Therefore, the answer will be for Jarvis to sell four December coffee future contracts at $2.00 per pound


Related Questions

An employee has​ year-to-date earnings of . The​ employee's gross pay for the next pay period is . If the FICAOASDI is ​% and the wage base is ​, how much FICAOASDI tax will be withheld from the​ employee's pay?​ (Answer is rounded to whole​ dollar.)

Answers

Answer:

$192

Explanation:

Calculation for how much FICA-OASDI tax will be withheld from the employee's pay?

FICA-OASDI tax=($117,000-$113,900)*6.2%

FICA-OASDI tax=$3,100*6.2%

FICA-OASDI tax=$192

Therefore how much FICA-OASDI tax will be withheld from the employee's pay is $192

McDonalds reported current year pretax book income of $365,000. Included in the computation were favorable temporary differences of $13,750, unfavorable temporary differences of $97,000, and unfavorable permanent differences of $45,000. McDonalds' current income tax expense or benefit would be

Answers

Answer:

the current income tax expense or benefit is $103,583

Explanation:

The computation of the current income tax expense or benefit is shown below:

Current income tax expense is

= (pre - tax book income - favourable temporary difference + unfavorable temporary difference + unfavourable permanent difference) × tax rate

= ($365,000 - $13,750 + $97,000 + $45,000) × 21%

= $493,250 × 21%

= $103,583

We assumed the tax rate be 21%

hence, the  current income tax expense or benefit is $103,583

A market that has a single supplier of a product with no close substitutes and barriers to entry is:________

a. an oligopoly.
b. monopolistically competitive.
c. a pure monopoly.

Answers

Answer:

c. a pure monopoly.

Explanation:

A monopoly is a market structure which is typically characterized by a single-seller who sells a unique product in the market by dominance. This ultimately implies that, it is a market structure wherein the seller has no competitor because he is solely responsible for the sale of unique products without close substitutes. Any individual that deals with the sales of unique products in a monopolistic market is generally referred to as a monopolist.

For example, a public power company is an example of a monopoly because they serve as the only source of power utility provider to the general public in a society.

Additionally, a public power company refers to a company that provides power (electricity) utility to the general public of a society.

Hence, a market that has a single supplier of a product with no close substitutes and barriers to entry is a pure monopoly.

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