Jacob runs an ethanol refining plant. Corn is the primary input in ethanol production. It is currently October 1st, and he knows that he has to make a large purchase of corn at a later date (May 1st ). Thus he is short cash corn on October 1st. His basis forecast for the beginning of May is - $0.13. Therefore, he places the hedge on October 1st, and lifts the hedge and purchases corn on May 1st. Using the following prices, answer the associated questions: October1st:Cashprice=$7.50/buJulyfutures=$7.80/buMay1st:Cashprice=$6.35/buJulyfutures=$6.51/bu QUESTION - Assume that he indeed purchased call options with a strike price of $7.80 (premium = \$0.25) on October 1st. Now, May 1 st comes along. On May 1 st Jacob should HINT - if you did not choose "buy call options" in question \#35, go back and change your answer. Indeed, you would "buy call options" to set a ceiling price. exercise the option, and therefore the final price paid for corn would be $7.92. exercise the option, and therefore the final price paid for corn would be $7.80. let the option expire. Therefore, the final price paid for corn would be $6.10 let the option expire. Therefore, the final price paid for corn would be $6.60 none of the above