37. True or False: Option writers have limited upside possible gains (assume they are not combining the sale with any other trades). 38. A call option has a premium of $150, the strike price for the option is $400 and the futures price today is $500. Assume the risk free rate is 0. The option has intrinsic value of: a. $50 b. $0 c. $100 d. $-100 39. Nervous Purvis produces soy bean meal and is think about hedging his next SALE of soy bean meal. Based on the selections below what should Purvis do? a. take a long position in the futures marked b. buy a call option c. buy a put option d. establish a long collar 40. A short hedger wishes to establish a collar. The futures price is $5.00/bu. Option 1 has a strike price of $6.00 and a premium of $0.20. Options 2 has a strike price of $4.00 and a premium of $0.20. To set up a short collar this hedger should: a. buy option 1 and option 2 b. buy option 1 while selling option 2 c. sell both options d. sell option 1 while buying option 2