Mackenzie manufactures tofu to be used in vegetarian "turkeys" for Thanksgiving. Back in August it looked like soybean supplies would be tight during her main manufacturing month of November. That would drive November soybean prices too high for profit. So she decides to buy a November call option on the futures market at $6.50/bushel. The nearby basis should be $0.35/bu in November. When November arrives, futures are at $6.75 and basis is as was expected. 

a. What is the local cash price in November?  

b. Will Mackenzie execute her call option or let it expire?   

c. Calculate the financial outcome of her action in the futures market. 

d. How much did Mackenzie save by her action?