QUESTION 10 Company purchases a call option in an effort to hedge an investment of 20,000 shares of Limbaugh Company stock. The option agreement provides that If the prices of a share of Limbaugh Company stock is greater than $30 on October 25, Inca receives the difference (multiplied by 20,000 shares). Alternatively, if the price of the stock is less than $30, the option is worthless and will be allowed to expire. Which of the following statements regarding this call option is correct? The call option represents a speculative option rather than a hedge. The call option effectively hedges the investment in the shares of Limbaugh stock The call option is an option to sell Limbaugh Company stock at a fixed price. Inca could have purchased a put option or a call option to effectively hedge the investment