Question

a basis with respect to 2. An ethanol plant manager is concerned about the future price of corn he needs to buy but he wants to benefit for any possible corn price decline, so he decides to buy a call option (December 21 Futures). He pays a premium of $ 0.06 for a Strike price of $4.20/bushel, and his BASIS ( at the time of corn purchase) with respect to the December Futures is -0.08/bushel. What is the price ceiling" he is creating?​

Answer 1

Answer:

4.28

Explanation:

4.20+ 0.06+ 0.08 add and get the the answer 4.28