12 march what futures are trading at 420 a bushel and

12. March what futures are trading at $4.20 a bushel and May wheat
futuresare trading at $4.35 a bushel. You expect the spread between May
and March futures prices to widen. To speculate on this view, you would
(a) Go long March futures and short May futures.
(b) Go long May futures and short March futures.
(c) Go long May futures.
(d) Go long March futures.
Answer b.13.
September corn futures are currently trading at $3.80 a bushel while
thespot price of corn is $3.65 a bushel, so the ”basis” (the futures price
minusthe spot price) is $0.15 a bushel. If you expect the basis to weaken
(i.e.,to fall) significantly in the next few days, you can speculate on your
view by
You go short oil 10 futures contracts on NYMEX when the futures price of oil
is $79 a barrel and close out your position three days later at a
futures price of $83 a barrel. One futures contract is for 1,000 barrels.
Ignoring interest on the margin account, the futures trading has resulted in
a