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    Profit and rate of return on contract

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    As it turns out , you were correct when you purchased four contracts for feeder cattle at 88.8, as the spot price on cattle rose to 101.2 on the delivery date given in your contracts. How much money did you make? What was your return on invested capital?

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    Solution Preview

    The volume per contract is 50,000 pounds
    The profit per contract = (101.2-88.8) X 50,000/100 = ...

    Solution Summary

    The solution explains how to calculate the profit and rate of return of a contract.