It is April, and Hans Anderson is planting his barley crop near Plunkett, Saskatchewan. He is concerned about losing his farm if his operations result in a loss at the end of the season. He expects to harvest 3,000 tonnes of barley and sell it in October. Futures contracts are available for October delivery with a futures price of $200 per tonne. Options with strike price of $200 per tonne are also available; puts cost $15 and calls cost $20.

a) If Hans takes a short position in futures on 3,000 tonnes of barley for delivery in October, what will be the total net amount received by Hans (for all 3,000 tonnes) if the price of barley in October is as follows: i) $150 ii) $200 iii) $250

b) If Hans can purchase put options on 3,000 tonnes of barley, what will be the total net amount received by Hans (for all 3,000 tonnes) if the price of barley in October is as follows: i) $150 ii) $200 iii) $250