7. Long Hedging with Options on Futures (Futures decrease) (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 $10.00; July futures at $10.25; Sell July $11.80 call at 15 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: _________________