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6. Long Hedging with Options on Futures (Futures increase) (5 pts) Today: Cash soybeans at $11.25; July futures at $11.50; Buy July $11.80 call at
6. Long Hedging with Options on Futures (Futures increase) (5 pts)
Today: Cash soybeans at $11.25; July futures at $11.50; Buy July $11.80 call at 50 cents
Later: Purchase cash soybeans at $12.00; July futures at $12.25; Sell July $11.80 call at 75 cents
What is the net purchase price of the soybeans? (Show work by answering each of the items below)
Cash price paid: _________________
+/- Option premium gain or loss: ___________________
Net buying price: __________________
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