F. Hedging with Futures (continued)

5. Assume on August 31, a developer “reverses” or closes his position by buying back December futures contracts at 65-05. The lower price is due to increased interest rates.
- Profits:
  - (67-17) - (65-05) = 2-12 or 2 12/32%
  - .02375 * $100,000 = $2,375/contract
  - or $1,187,500 for 500 contracts

5. Assume on August 31, a developer “reverses” or closes his position by buying back December futures contracts at 65-05. The lower price is due to increased interest rates.