1. Assume you buy a December corn call option with a strike price of $3.70 at a premium cost of 8 cents a bushel. Also, assume your broker charges $25 transaction costs per contract and you have 10 contracts. a. What is the breakeven price that you established by buying this call option? (2 points) b. What would be your buying price of corn if the December futures price in November were the price shown in the left-hand column? Indicate if you would exercise (4 pts) Nov. futures Price Buying Price (strike) what is intrinsic value? Exercise? Y or N $3.40 3.70 $3.70 3.70 $3.78 3.70 $4.02 _3.70 C. Based on your previous answer in a and b, how much would you lose or gain taking in account the broker charges if you decide to exercise your option ? Show your work (3 points). 1. Assume you buy a December corn call option with a strike price of $3.70 at a premium cost of 8 cents a bushel. Also, assume your broker charges $25 transaction costs per contract and you have 10 contracts. a. What is the breakeven price that you established by buying this call option? (2 points) b. What would be your buying price of corn if the December futures price in November were the price shown in the left-hand column? Indicate if you would exercise (4 pts) Nov. futures Price Buying Price (strike) what is intrinsic value? Exercise? Y or N $3.40 3.70 $3.70 3.70 $3.78 3.70 $4.02 _3.70 C. Based on your previous answer in a and b, how much would you lose or gain taking in account the broker charges if you decide to exercise your option ? Show your work (3 points)