Suppose you purchase the May 2017 put option on corn futures with a strike price of $3.80.
Question:
Suppose you purchase the May 2017 put option on corn futures with a strike price of $3.80. Assume your purchase was at the last price of the day. Use Table 23.2 a.How much does your option cost per bushel of corn? (Round your answer to 5 decimal places, e.g., 32.16161.) b.What is the total cost for one contract? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c.Suppose the price of corn futures is $3.61 per bushel at expiration of the option contract. Each contract is for 5,000 bushels. What is your net profit or loss from this position? (Enter your answer as a positive value. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) d.What is your net profit or loss if corn futures prices are $3.97 per bushel at expiration? (Enter your answer as a positive value. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Fundamentals of Investments Valuation and Management
ISBN: 978-0077283292
5th edition
Authors: Bradford D. Jordan, Thomas W. Miller