Question)

Debra is a jeweler that regularly purchases ingots of gold so as to manufacture jewelry. She is concerned that adverse price movements will increase the cost of manufacturing her products and so purchases a call option written on gold. The option she purchases is a European-style option with an exercise price of $2,600 for an ounce of gold. Debra pays $350 for the option and the current price of gold is $2,400 per ounce. Draw the profit diagram of the option described above. Make sure you label all axes, turning points and intercepts