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17. Suppose you own a grove of orange trees. The harvest is still two months away but you are concerned about price risk. You want to guarantee that you will receive $1.00 per pound in two months regardless of what the spot price is at that time. You are selling 250,000 pounds. Now suppose instead of taking a short position in the futures market, you purchase insurance in the form of a put option on 250,000 pounds) that guarantees you a minimum price of $1.00 per pound. Assume the option cost you $25,000 a. Show the economics of this transaction if the spot price on the delivery date is $0.75, $1.00, or $1.25 per pound. Under what circumstances would you exercise your option? b. How does your potential for gain differ between the hedge transaction and the insurance transaction