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Question 1 5 4 p t s An elevator anticipates purchasing 1 , 0 0 0 , 0 0 0 bushels of soybeans on the

Question 15
4pts
An elevator anticipates purchasing 1,000,000 bushels of soybeans on the spot market at harvest and wants to use options to hedge price risk. The size of one option on soybeans is 5,000 bu. In order to protect itself from potentially unfavorable movements in the spot price between now and the harvest, the elevator manager can
sell 200 put options on soybeans.
sell 200 call options on soybeans.
buy 200 put options on soybeans.
buy 200 call options on soybeans.
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