On August 1, an Oil Producer Decided to Hedge the Fair

Multiple Choice

On August 1, an oil producer decided to hedge the fair value of its inventory by acquiring a futures contract to sell 100,000 barrels of oil on November 1 for $85.00 each.Price data follow: ?
$$\begin{array} { l r r } & \text { Spot Frice } & \text { Futures Price } \\\text { August 1 } & \$ 84.00 & \$ 85.00 \\\text { September 1 } & 82.80 & 83.50 \\\text { October 1 } & 82.20 & 82.40 \\\text { November 1 } & 81.00 & 81.00\end{array}$$ What was the fair value of the contract on October 1?

A) -$280,000
B) -$110,000
C) -$260,000
D) -$20,000