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Suppose you purchase the May 2017 call option on corn futures with a strike price of $3.95. Assume you purchased the option at the last
Suppose you purchase the May 2017 call option on corn futures with a strike price of $3.95. Assume you purchased the option at the last price of the day. Use Table 23.2 a. How much does your option cost per bushel of corn? (Do not round intermediate calculations and round your answer to 5 decimal places, e.g., 32.16161.) b. What is the total cost of your position? Assume each contract is for 5,000 bushels. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. Suppose the price of corn is $3.79 per bushel at expiration of the option contract. What is your net profit or loss from this position? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Enter your answer as a positive value.) d. What is your net profit or loss if corn futures prices are $4.21 per bushel at expiration? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Enter your answer as a positive value.) per bushel a. Option cost b. Total cost c. Loss d. Profit TABLE 23.2 Sample CME Group Futures Options Price Quotations gruar La May 2017 Type American Options Expiration May 2017 Strise Range: At The Money Pus arms Low Per tate Change Laut High TO TH 27 27 200 5 re 03 376 37" i 9 - 233 87 2 73 3 79 00 CT els be 137 3100 05 GT 2 2 97 1 30 CT Ore 2011 9 250 S 3 00 13 103 $ 101 10 7 10 1600 22 6 9 3 re 20 27 . . 200 00 . TO 5 125 200 5 B $ : : fe es -- LE 00 2018 No IT na
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