Aaron Purchased a Call on 35,000 Bushels of Corn with a Strike

question 95

Multiple Choice

Aaron purchased a call on 35,000 bushels of corn with a strike price of 210. On the expiration date, the corn was selling at $1.98 per bushel. Option contracts on corn are based on 5,000 bushels. Ignore the cost of the call and all transaction costs. What is the payoff on the call contract?

• A) -$4,200
• B) -$2,100
• C) $0
• D) $2,100
• E) $4,200

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Definitions:

Problem Solving

The process of identifying a challenge and finding an effective solution for it.

Cerebral Cortex

The outer layer of the cerebrum in the brain, involved in various high-level brain functions such as thought, memory, and consciousness.

Primary Motor Cortex

An area of the brain located in the frontal lobe, involved in planning, control, and execution of voluntary movements.

Somatosensory Cortex

The part of the brain responsible for processing sensory information from across the body, such as touch, temperature, and pain.