In July 2021, a small chocolate factory receives a large order for chocolate bars to be delivered in November.The spot price for Cocoa is $1,600 per metric ton. It will need 20 metric tons of Cocoa in September to fill this order.Because of limited storage capacity and volatility in the world cocoa prices, the company decides the best strategy is to buy 20 call options for $32 each with strike price of $1,600 (equal to the current price) with a maturity date of September 2021. When the options expire in September, how much will the company effectively pay (including the premium and payoff of the options) for cocoa if the spot price in September proves to be:

a) $1,300,The answer is

b) $1,900. The answer is