Problem $27-5$ Futures and options

Parfum P$$trochimique $($PP$)$ is concerned about a possible increase in the price of heavy fuel oil, which is one of its major inputs. If PP

could use either options or futures contracts to protect itself against a rise in the price of crude oil, compute the payoffs in each case

would vary if the oil price were $$52,$$$62,$ or $$72$ a barrel. Assume the current price of oil is $$52$ per barrel, the futures price is $$62,$ and

the option exercise price is $$62.$