Hershey's Chocolate Is Concerned About Cocoa Prices,which Are Currently $3,000

question 50

Multiple Choice

Hershey's Chocolate is concerned about cocoa prices,which are currently $3,000 a ton.Analysts project that the cost of cocoa purchases could vary from $2,900 to $3,100 a ton.A September call option can be purchased with a $2,950 exercise price for $145.What is Hershey's worst-case scenario if it purchases these options?

• A) Cocoa prices will rise to $3,100 and Hershey is protected only to a price of $2,950.
• B) Cocoa prices will not change from their current level and Hershey will have wasted the cost of the option.
• C) Cocoa prices will not rise above Hershey's break-even price of $3,095, which equals the sum of the exercise price plus the cost of the option.
• D) Cocoa prices will fall below $2,950 and Hershey will lose the $145 cost of the option.

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Definitions:

Self-determination Theory

Self-determination Theory is a theory of human motivation that emphasizes the role of autonomy, competence, and relatedness in fostering well-being.

Relatedness

Feeling connected to others, both personally and in your community.

Unconscious Motivations

Drives and desires operating below an individual's conscious awareness, influencing behavior and thought processes.

Implicit Motives

Unconscious drives and desires that influence behavior, often contrasting with explicit motives which are consciously recognized by the individual.