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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