Question

You purchased one July futures contract of pork bellies at​ $.59 per lb. One contract represents​ 40,000 lbs. of pork bellies. By the end of the​ day, the price had fallen to​ $.57 per lb. How much did the value of your contract change during the​ day?

Answer 1

the change is a decline in value by $800

Step-by-step explanation:

The Change in the value of the contract during the day is the difference between the price of purchase and the price at the end of the day grossed as a product by multiplying with the units purchased per contract.

Value of change

= ($.57 - $.59) * 40,000

= - $.02 * 40,000

= - $800

There was a drop of $800.

Answer 2

$800

Explanation: pork bellies contract purchased at $0.59 per lb.

One contract = 40,000 lbs.

$0.59 x 40,000 = $23,600.

Drop in price to $0.57 per lb at the end of the day.

$0.57 x 40,000 = $22,800

Change in value of the contract during the day

Original contract - drop in price

$23,600 - $22,800. = $800