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: __________________