1. Box 1, what is the storage cost for the hedge calculation?

A) $0.00

B) -$0.12

C) -$0.15

D) -$0.21

2. Box 2, what is the basis for the hedge calculation?

A) $0.00

B) -$0.12

C) -$0.15

D) -$0.21

3. Box 3, what is the brokerage cost for the hedge calculation?

A) $0.00

B) -$0.01

C) -$0.12

D) -$0.15

4. Box 4, what is the net hedge price?

A) $3.00

B) $3.70

C) $3.98

D) $4.00

5. Box 5, what is the expected net minimum price?

A) $3.51

B) $3.70

C) $3.98

D) $4.00

6. Box 6, what is the actual basis for the price down?

A) $0.00

B) -$0.12

C) -$0.15

D) -$0.21

7. Box 7, what is the cash price for the price down?

A) $2.75

B) $2.90

C) $2.98

D) $3.51

8. Box 8, what is the return from the put for the price down?

A) $0.00

B) $0.75

C) $1.00

D) $1.10

9. Box 9, what is the put premium?

A) $0.00

B) -$0.12

C) -$0.15

D) -$0.21

10. Box 10, what is the net returns from the put option buy/sell for price down?

A) $0.00

B) -$0.21

C) $0.89

D) $1.10

11. Box 11, what is the storage cost?

A) $0.00

B) -$0.01

C) -$0.12

D) -$0.15

12. Box 12, what is the brokerage cost?

A) $0.00

B) -$0.01

C) -$0.12

D) -$0.15

13. Box 13, what is the net returns to the option with the price down?

A) $0.50

B) $0.76

C) $0.89

D) $1.10

14. Box 14, what is the net price received with the price down?

A) $2.75

B) $2.90

C) $3.51

D) $4.00

15. Box 15, what is the actual basis for price up?

A) $0.00

B) -$0.12

C) -$0.15

D) -$0.21

16. Box 16, what is the cash price for the price up?

A) $3.51

B) $4.00

C) $4.55

D) $4.70

17. Box 17, what is the return from the put for the price up?

A) $0.00

B) $0.15

C) $0.70

D) $1.15

18. Box 18, what is the put premium?

A) $0.00

B) -$0.12

C) -$0.15

D) -$0.21

19. Box 19, what is the net returns from the put option buy/sell for price up?

A) -$0.21

B) $0.00

C) $0.45

D) $0.49

20. Box 20, what is the storage cost?

A) $0.00

B) -$0.01

C) -$0.12

D) -$0.15

21. Box 21, what is the brokerage cost?

A) $0.00

B) -$0.01

C) -$0.12

D) -$0.15

22. Box 22, what is the net returns to the option with the price up?

A) -$0.34

B) $0.00

C) $0.34

D) $1.00

23. Box 23, what is the net price received with the price up?

A) $3.51

B) $4.21

C) $4.55

D) $4.75

Important information, the expected basis is the same as the actual basis. Directions: fill out the worksheet and then transfer your answers to the following multiple- choice questions. $3.98 Futures Storage Box 2 Box 3 Basis Box1 Brokerage Hedge: Net Price Box 4 July $4.00 (Strike Price) Month, Buy Put Expected Basis -0.15 Storage Cost -0.12 Put Premium -0.21 Brokerage Cost -0.01 Expected Minimum Box 5 Price Price Down $2.90 Price Up $4.70 July Futures Month Box 6 Box 15 Actual Basis Box 7 Box 16 Cash Price Box 8 Box 17 Sell Put Buy Put Box 9 Box 18 (premium) Plus Net Returns from Put Option Buy/Sell Box 10 Box 19 Less: Storage Costs Box 11 Box 20 Box 12 Box 21 Brokerage Cost Equals Net Returns Box 13 Box 22 Equals Net Price Received Box 14 Box 23 Important information, the expected basis is the same as the actual basis. Directions: fill out the worksheet and then transfer your answers to the following multiple- choice questions. $3.98 Futures Storage Box 2 Box 3 Basis Box1 Brokerage Hedge: Net Price Box 4 July $4.00 (Strike Price) Month, Buy Put Expected Basis -0.15 Storage Cost -0.12 Put Premium -0.21 Brokerage Cost -0.01 Expected Minimum Box 5 Price Price Down $2.90 Price Up $4.70 July Futures Month Box 6 Box 15 Actual Basis Box 7 Box 16 Cash Price Box 8 Box 17 Sell Put Buy Put Box 9 Box 18 (premium) Plus Net Returns from Put Option Buy/Sell Box 10 Box 19 Less: Storage Costs Box 11 Box 20 Box 12 Box 21 Brokerage Cost Equals Net Returns Box 13 Box 22 Equals Net Price Received Box 14 Box 23