Use the numbers in the table below to answer questions 8 and 9. Date Spot Price Bu. September Futures Price January 1 March 1 June 1 $7.60 $7.40 $7.95 $8.30 $7.75 S8.15 Note: Storage cost is $0.10/month/bushel The elevator agrees to pay farmer the spot price on any date the farmer chooses less a total fee that consists of: a flat fee of $0.15/Bu, and a S0.11/Bu. fee per month. The farmer delivers the grain on January 1 whereupon the elevator immediately sells the grain at the January spot plus $0.08 and also hedges. On June 1, the farmer demands his money. 8. How does the elevator hedge over this period? a. Long hedges with the March contract for 5 months from 1/1 - 6/1. b. Short hedges with the March contract for 5 months from 1/1 - 6/1. c. Long hedges with the September contract for 5 months from 1/1 - 6/1. d. Short hedges with the September contract for 5 months from 1/1 - 6/1.. e. By selling the grain in the spot market. 9. What is the profit of the elevator (per bushel). Hint: The farmer pays the $0.15 flat fee. The farmer pays the $0.11 fee/mo. 2. $0.15 b. $0.28 c. $0.43 d. $0.58 e. S0.73