1. Jim is a project developer who has applied for a permit in order to build a shopping mall in a neighborhood that is zoned exclusively for residential housing.

(a) In order for Jim to successfully obtain the permit, what must Jim also obtain from the local zoning authorities so that he is able to build the shopping mall? (3 points

(b) If Jims application to obtain the permit is rejected, how could use of an option contract help Jim minimize any financial loss incurred as a result of this failed project?