16. A call option gives you the right to buy an asset (flour in this case) at a fixed price. And a put option gives you the right to sell an asset (cookie in this case) at a fixed price. The call/put brokerage fee is $200 each, and the call/put premium is $3,000 each. Suppose you have a $4 call option and the flour price (per unit) will increase to $5, your net profit will be $ No hedging Hedging Revenues Sales (60.000 units @$3 each) $180,000 Payoff on call Payoff on put Expenses Flour (10,000 units @$4 each) $40,000 16. A call option gives you the right to buy an asset (flour in this case) at a fixed price. And a put option gives you the right to sell an asset (cookie in this case) at a fixed price. The call/put brokerage fee is $200 each, and the call/put premium is $3,000 each. Suppose you have a $4 call option and the flour price (per unit) will increase to $5, your net profit will be $ No hedging Hedging Revenues Sales (60.000 units @$3 each) $180,000 Payoff on call Payoff on put Expenses Flour (10,000 units @$4 each) $40,000