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4. Assume you are speculating that wheat prices will continue to slightly increase over the next several months and you wish to Sell a Put

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4. Assume you are speculating that wheat prices will continue to slightly increase over the next several months and you wish to Sell a Put Option for December wheat. Checking the markets, you see that a wheat put option with a strike price of $5.56/bushel has a premium of $0.09 per bushel. Assume you wait until December (maturity) to evaluate the outcome. Remember, as the seller of this option you receive the premium up front. Answer the following questions: m. Graph this Sell Put Option using the options payoff chart discussed in the lectures clearly labeling the axes, strike price, premium, and breakeven price. (10 Points) n. At what market price of wheat (in $/bushel) would you have made a net gain on this option? You may include a range of prices if you prefer. (5 Points) 0. At what market price of wheat (in $/bushel) would the option have been used by the buyer? You may include a range of prices if you prefer. (5 Points) p. At what market price of wheat (in $/bushel) would the owner of the option have just let the option expire? You may include a range of prices if you prefer. (5 Points)

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