Question: WIDGETCO produces widgets. Each widget generates $ 4 6 0 in revenue and requires one ounce of gold as an input. WIDGETCO plans to produce

WIDGETCO produces widgets. Each widget generates $460 in
revenue and requires one ounce of gold as an input. WIDGETCO
plans to produce and sell one widget in exactly one year. The c.c.
risk-free rate is zero percent.
WIDGETCO is considering hedging their gold exposure with a call
option. The premium on a one-year call option on gold with a
strike of $420 per ounce is $8.77. If the price of gold is $450 per
ounce in one year, what is WIDGETCO's hedged profit?
WIDGETCO produces widgets. Each widget generates $460 in revenue and requires

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