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07.07.2022 - 10:09

In the Chicago Board of Trade s corn futures contract, the following delivery months are available: March, May, July, September, and December. State the contract that should be used for hedging when the expiration of the hedge is in (a) June, (b) July, a

Question:

In the Chicago Board of Trade s corn futures contract, the following delivery months are available:

March, May, July, September, and December.

State the contract that should be used for hedging when the expiration of the hedge is in (a) June, (b) July, and (c) January.

Answers (1)

Elouise April 1, 2023 в 22:49

(a) For hedging when the expiration of the hedge is in June, the nearest available delivery month is May as it precedes June. (b) For hedging when the expiration of the hedge is in July, the delivery month available is July itself, which is the month of expiration. (c) For hedging when the expiration of the hedge is in January, the delivery month available is December, as it comes closest to the expiration month of January.

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