20) An elevator operator typically purchases huge amounts of grain from farmers.

Assume the following prices.

DateSpot Price/BuMarch Futures Price

September1$2.10$2.34

October1$2.05$2.20

November1$2.20$2.38

It costs the elevator $0.05/Bu/month to store the grain.

An elevator purchases grain from a farmer on September 1 at 3 cents under the spot and immediately sells it for 1 cent over the spot price.

What is the total profit, from both the spot and futures markets, per bushel of the elevator operator?

a. a loss of 6 cents

b. none of these other answers are correct

c. a gain of 5 cents

d. a gain of 4 cents