Question: Parfum Ptrochimique (PP) is concerned about a possible increase in the price of heavy fuel oil, which is one of its major inputs. If PP

Parfum Ptrochimique (PP) is concerned about a possible increase in the

Parfum Ptrochimique (PP) is concerned about a possible increase in the price of heavy fuel oil, which is one of its major inputs. If PP could use elther options or futures contracts to protect itself against a rise in the price of crude oil, compute the payoffs in each case would vary if the oil price were $66,$76, or $86 a barrel. Assume the current price of oil is $66 per barrel, the futures price is $76, and the option exercise price is $76

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