You would like to lock in the selling price on 60,000 bushels of wheat, which you plan to harvest and deliver to the market in september. the september futures price quote is currently 902΄6. if you write september futures contracts on your wheat, you will be guaranteed a total price of for your crop. each contract is quoted in cents and 1/8 ths of a cent per bushel with a contract size of 5,000 bushels.

Ummit record company is negotiating with two banks for a $157,000 loan. fidelity bank requires a compensating balance of 24 percent, discounts the loan, and wants to be paid back in four quarterly payments. southwest bank requires a compensating balance of 12 percent, does not discount the loan, but wants to be paid back in 12 monthly installments. the stated rate for both banks is 9 percent. compensating balances will be subtracted from the $157,000 in determining the available funds in part a. a-1. calculate the effective interest rate for fidelity bank and southwest bank. (do not round intermediate calculations. input your answers as a percent rounded to 2 decimal places.) a-2. which loan should summit accept? southwest bank fidelity bank b. recompute the effective cost of interest, assuming that summit ordinarily maintains $37,680 at each bank in deposits that will serve as compensating balances