Suppose you are interested in taking a safari to Kenta, Africa, next summer but are worried about the price of the trip, which has ranged from $2,500 to $3,500 over the past five years. The current price is $3,000. Suppose you wanted to maintain the possibility of a lower price.
1. How could you eliminate the risk of rising prices but still maintain the possible gain from lower prices?
2. How might you pay for this option?