1. Research a company that has reduced its inventory holdings over the last few decades. What risks is the company taking? Has this made their inventory more or less difficult to manage?
2. A company enters into 10 short futures contracts to sell 5,000 bushels of corn each (50,000 bushels in all) for 400 cents per bushel. The initial margin per contract is $4,000 and the maintenance margin is $3,000. At what price does corn need to rise to to trigger a margin call?