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elf_fu elf_fu
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7 years ago
KidCo Cereal Company sells "Sugar Corns" for $2.50 per box. The company will need to buy 20,000 bushels of corn in 6 months to produce 40,000 boxes of cereal. Non-corn costs total $60,000. What is the company's profit if they purchase call options at $0.12 per bushel with a strike price of $1.60? Assume the 6-month interest rate is 4.0% and the spot price in 6 months is $1.65 per bushel.
A) $6,504 profit
B) $8,005 loss
C) $12,064 profit
D) $11,293 loss
Textbook 
Derivatives Markets

Derivatives Markets


Edition: 3rd
Author:
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phuongha2892phuongha2892
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#1
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7 years ago
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elf_fu Author
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7 years ago
I appreciate what you did here, answered it right Smiling Face with Open Mouth
Jodias
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Yesterday
this is exactly what I needed
jmendoza
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2 hours ago
Brilliant ツ
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