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Corn call options with a $1.75 strike price are trading for a $0.14 premium. Farmer Donald decides to hedge his 20,000 bushels of corn by
Corn call options with a $1.75 strike price are trading for a $0.14 premium. Farmer Donald decides to hedge his 20,000 bushels of corn by selling short call options. The continuously compounded risk-free interest rate is 7.84% and he plans to close his position in 6 months. What is the total premium he will earn on his short position?
a) $2,800
b) $2,912
c) $800
d) $1,600
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