What did net for the corn

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Reference no: EM132758628

Problem 1: In May 2017, suppose that December 2017 corn futures were trading at $4.50/bushel. Farmer Jones went long a Dec 2017 $4.00-strike corn futures put (paying 45 cents for this downside protection). He harvested his corn the same day that the December corn options expired. At that time, the Dec. 2017 corn futures price had fallen to $3.50/bushel and the basis was 20 under. What did he net for his corn? Ignore interest rates, if any (i.e., assume the risk-free rate was 0). Please explain briefly.

A. $4.00
B. $3.80
C. $3.35
D. $3.30
E. $2.85
F. None of the above

Reference no: EM132758628

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