You own a small gold mine in Mexico. You expect to deliver 200 ounces of gold to the market in April. You decide to hedge your position at the 550 exercise price. How much will you receive in total, including the option premium, for your 200 ounces of gold if the market price of gold is $552 in April?

Gold - 100 troy oz.; $ per troy oz.

Question

You own a small gold mine in Mexico. You expect to deliver 200 ounces of gold to the market in April. You decide to hedge your position at the 550 exercise price. How much will you receive in total, including the option premium, for your 200 ounces of gold if the market price of gold is $552 in April?

Gold - 100 troy oz.; $ per troy oz.
You own a small gold mine in Mexico. You expect to deliver 200 ounces of gold to the market in April. You decide to hedge your position at the 550 exercise price. How much will you receive in total, including the option premium, for your 200 ounces of gold if the market price of gold is $552 in April? Gold - 100 troy oz.; $ per troy oz. A) $108,180 B) $108,980 C) $109,380 D) $110,000 E) $111,820

Gold - 100 troy oz.; $ per troy oz.

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The Answer of You own a small gold mine in Mexico. You expect to deliver 200 ounces of gold to the market in April. You decide to hedge your position at the 550 exercise price. How much will you receive in total, including the option premium, for your 200 ounces of gold if the market price of gold is $552 in April?

Gold - 100 troy oz.; $ per troy oz.

You Own a Small Gold Mine in Mexico