A Milling Company Buys a Futures Contract That Requires It

A milling company buys a futures contract that requires it to take delivery of 5,000 bushels of wheat at a price of $6.75 per bushel.Next day the price of the future is $6.80.The miller:

A) must pay an extra $0.05 a bushel into its margin account.
B) can withdraw $0.05 from its margin account.
C) does not need to do anything until the contract matures.
D) can't say without knowing what happened to the spot price.

Correct Answer:

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