Uncertainty - Page 10 of revision notes

Where demand is 10 and contract size is 20. The demand gives a profit is 10 x (20 - 10 ) = 100 There are 10 not sold, and so they give a loss of 10 x (1 - 10 ) = 90 So the net profit is 100 - 90 = 10 When demand is 10 and contract since is 30. The demand gives a profit of 10 x (20 - 10) = 100 There are 20 not sold, and so they give a loss of 20 x (1 - 10) = 180 So a loss of 100 - 180 = 80/ When demand is 20 and contact size is 30. The demand gives a profit of 20 x (20 - 10) = 200 There are 10 units not sold, and so they give a loss of 10 x (1 - 10) = 90 So a profit of 200 - 90 = 110