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Assume that the effective interest rates for a six month

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Farmer Jayne bought a $1.70-strike put option for $0.11 and sold a $1.75-strike call option for a premium of $0.14. Both options expire in six months. Her total costs of producing the corn are $1.65 per bushel. She will sell the 20, 000{bushel corn crop in six months. Assume that the effective interest rates for a six month period are 4.0% What is the minimum profit in her strategy?

(a) $624

(b) $1,624

(c) $2,624

(d) $3,624

(e) None of the above.

Reference no: EM13574228

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