Kizspy | Question: 17
(Choose 1 answer)
(27600) Farmer Jayne decides to hedge 10,000 bushels of corn by purchasing put options with a strike price of $1.80. Six-month interest rates are 4.0% and the total premium on all puts is $1,200. If her total costs are $1.65 per bushel, what is her marginal change in profits if the spot price of corn drops from $1.80 to $1.75by the time she sells her crop in 6 months?
A. $248 loss
B. $0
C. $252 gain
D. $1,500 loss
