Suppose the Current Spot Price of Corn Is $20 a Bushel

question 39

True/False

Suppose the current spot price of corn is $20 a bushel. A corn farmer expects to produce 2,000 bushels at the end of the season, and she wants to ensure that she gets at least $18 per bushel. Call options on 1,000 bushels of wheat with a strike price of $15,000 and an expiration date at the end of the season are selling for $3,000. By selling call options on her corn crop, the farmer can guarantee that she gets at least $18 per bushel.

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Definitions:

Stereotyping

The act of categorizing individuals or groups into simplified and fixed traits, often leading to misconceptions and bias.

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Individuals who have grown up with access to digital technology from an early age, making them proficient with digital devices and the internet.