help with futures question..not real story but need the answer, A person just

  • Thread starter Thread starter Bob L
  • Start date Start date
B

Bob L

Guest
heard a news story? A person just heard a news story about mad cow disease in a nearby country, and they believe that feeder cattle prices will rise in the next few months as people buy more from the US. Another person thinks that prices will fall because people will be afraid to eat beef. The first person goes to the CME and finds out that feeder cattle futures for delivery in April are quoted at 88.8. The contract size is 50,000 lb. What is the market value of one contract? how do you find the answer?
 
The contract, or amount to be delivered is 50,000 pounds and the price quoted is 88.8 cents per pound. All you have to do is multiply the 50,000 by 88.8 but remember that your answer is in cents. If you want dollars (or pounds) you need to divide by 100.
 
Quotes on future commodity contracts can be found in the Wall Street Journal and Barrons at your public library.
 
Quotes on future commodity contracts can be found in the Wall Street Journal and Barrons at your public library.
 
Back
Top