Suppose you purchase the July 2020 call option on corn futures with a strike price of $3.35.
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Question:
| Suppose you purchase the July 2020 call option on corn futures with a strike price of $3.35. Assume you purchased the option at the last price of the day. Use Table 23.2. |
| a. | How much does your option cost per bushel of corn? (Do not round intermediate calculations and round your answer to 5 decimal places, e.g., 32.16161.) |
| b. | What is the total cost of your position? Assume each contract is for 5,000 bushels. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
| c. | Suppose the price of corn is $3.27 per bushel at expiration of the option contract. What is your net profit or loss from this position? (Do not round intermediate calculations and enter your answer as a positive value rounded to 2 decimal places, e.g., 32.16.) |
| d. | What is your net profit or loss if corn futures prices are $3.59 per bushel at expiration? (Do not round intermediate calculations and enter your answer as a positive value rounded to 2 decimal places, e.g., 32.16.) |
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