Suppose you are the CFO of an oil refiner and you wish to hedge your future purchase price risk of crude oil using options. Your company will need to purchase a total of 6.4 million barrels of oil in next four months.

The six-month crude oil futures contract is trading at $38/bbl. The price of the four-month 34 put is $2.05/bbl. The price of the four-month 41 call is $2.25/bbl.

Instead of buying futures contracts at $38 to hedge your risk, you decide that you will purchase the 41 call options to hedge your price risk.

a) How many contracts do you need to purchase? (Round answer to zero decimals. Do not round intermediate calculations)

b) What is your total cash outlay? (Round answer to zero decimal places. Do not round intermediate calculations)

c) What is your breakeven point in terms of the oil settlement price? (Round answer to 2 decimal places. Do not round intermediate calculations)

d) What is your maximum loss (in $/bbl)? (Round answer to 2 decimal places. Do not round intermediate calculations)

e) What is your maximum gain (in $/bbl)? (Round answer to 2 decimal places. Do not round intermediate calculations)

f) If the price of oil settles at $46 in four months, what is your net purchase price? (Round answer to 2 decimal places. Do not round intermediate calculations)

g.) If the price of oil settles at $33 in four months, what is your net purchase price? (Round answer to 2 decimal places. Do not round intermediate calculations)