Question

Use the following corn futures quotes:  

Corn 5,000 bushels
Contract Month	Open	High	Low	Settle	Chg	Open Int
Mar	455.125	457.000	451.750	452.000	−2.750	597,913
May	467.000	468.000	463.000	463.250	−2.750	137,547
July	477.000	477.500	472.500	473.000	−2.000	153,164
Sep	475.000	475.500	471.750	472.250	−2.000	29,258

   

Suppose you buy 22 of the September corn futures contracts at the last price of the day. One month from now, the futures price of this contract is 463.25, and you close out your position. Calculate your dollar profit on this investment. (A negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.)

Answer 1

Initial value of position = 22*(5,000)($4.7225) = $519,475.00

Final value of position = 22(5,000)($4.6325) = $509,575.00

Dollar profit = $509,575.00 – $519,475.00 = –$9,900.00