They purchase call options at 10 per bushel with strike, Financial Management

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They purchase call options at 10 per bushel with strike

kellogs cereal company sells corn cereal for $3 per box. The company will need to buy 50,000 bushells of corn in 1 year to produce 50,000 boxes of cereal. Non-crn costs total 60,000. The company buys call options on corn to hedge its risk. They purchase call options at .10 per bushel with a strike price of $1.50. What is the company profit if the price of corn is 1.65 in one year.

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Financial Management: They purchase call options at 10 per bushel with strike

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