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Please help in any way that you can 10. A soybean farmer plans to sell a portion of their crop in October. To set up
Please help in any way that you can
10. A soybean farmer plans to sell a portion of their crop in October. To set up a short hedge, the farmer purchases a put option with a strike price of 750/bu, at a premium of 30/bushel. In October, the soybean cash price is 640/bu, and November soybean futures are trading at 655/bu. Fill in the table given here to describe the actions this farmer will take in the cash & futures exchange to hedge, the gain/loss the manufacturer will experience in these markets, and the net price that the manufacturer will receive for soybeans. Time Period Spot Market Futures & Options Markets June No action Purchase a put option Strike Price = 750/bu. Premium = 30/bu. October Gain/Loss Net Price 2Step by Step Solution
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