13. You are offered the opportunity to receive for free the payoff

[Q(T ) − F0,T (Q)]× max[0, S(T ) − K]

(Note that this payoff can be negative.) Should you accept the offer?

14. An agricultural producer wishes to insure the value of a crop. Let Q represent the quantity of production in bushels and S the price of a bushel. The insurance payoff is therefore Q(T ) × V [S(T ), T ], where V is the price of a put with K = $50. What is the cost of insurance?