Inca Company Purchases a Call Option to Hedge an Investment

Inca Company purchases a call option to hedge an investment of 20,000 shares of Limbaugh Company stock.The option agreement provides that if the prices of a share of Limbaugh Company stock is greater than $30 on October 25,Inca receives the difference (multiplied by 20,000 shares) .Alternatively,if the price of the stock is less than $30,the option is worthless and will be allowed to expire.Which of the following statements regarding this call option is correct?

A) The call option effectively hedges the investment in the shares of Limbaugh stock.
B) The call option is an option to sell Limbaugh Company stock at a fixed price.
C) The call option represents a speculative option rather than a hedge.
D) Inca could have purchased a put option or a call option to effectively hedge the investment in the shares of Limbaugh stock.