Ron has entered the high-stakes world of commodities trading. On April

QUESTION

Ron has entered the high-stakes world of commodities trading. On April 1, he signed a futures contract to buy 200 metric tons of soybeans on October 1 at $526 per metric ton.

The current price is $485 per metric ton. What will the price be on October 1 for Ron to join the rarefied 10 percent of commodities traders?
A) $479 per metric ton
B) $496 per metric ton
C) $504 per metric ton
D) $526 per metric ton
E) $542 per metric ton

ANSWER

Answer: E
Explanation: E) Ron is contracted to buy soybeans at $526 per metric ton on October 1, which is below the market price of $542. At this price, Ron is one of the 10 to 15 percent of commodities traders who do not lose money.