Your cousin is a hog farmer and he invests in pork belly futures and options contracts. He has told you that he believes pork belly prices is on the rise. You decide to purchase a call option on pork bellies with a strike price of $.50 per pound.if pork belly price goes up you can exercise the call, buy the pork bellies and sell them for higher spot price. Assume the price of an option on 40,000 pounds is $1,000 and you purchase 5 options for $5,000 on 200,000 pounds A) what is your downside risk in dollars and % B) would this be risk reducing or speculative transactions for you C) if the price per pound increase to $.55 per pound how much would you net after paying for the options