B) 3.64 5. [5 marks] CornGrower is going to sell corn in one year. In order to lock in a fixed selling price, CornGrower buys a put option and sells a call option on each bushel, each with the same strike price and the same one-year expiration date. The current price of corn is $3.59 per bushel, and the net premium that CornGrower pays now to lock in the future price is $0.10 per bushel. The continuously compounded risk-free interest rate is 4%. Calculate the fixed selling price per bushel one year from now. A) 3.54 C) 3.74 D) 3.84 E) None of these 6. [8 marks] Suppose you desire to short-sell 200 shares of B&L stock, which has a bid price of $50.21 and an ask price of $50.45 You cover the short position 3 months later, when the bid price is $48.94 and the ask price is $49.06. a) What profit would you earn only taking into account the bid and ask prices (ignoring commissions and interest)? b) What profit would you earn if there is a 0.1% commission both for the purchase and the sale of the stock, and you also earn interest on the proceeds of the short sale at a 3-month 1% effective rate? a