Determining the worst-case scenario


Hershey's Chocolate is concerned about cocoa prices prior to building inventory for Halloween sales. Analysts project that price per ton could vary from $1,250 to $1,500. A September call option can be purchased with a $1,300 strike price for a premium of $145. What is Hershey's worst-case scenario if it purchases these options?

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Finance Basics: Determining the worst-case scenario
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