If the Watchmaker receives the order and the gold price declines to $380/oz the Watchmaker will...

a) take advantage of the right conveyed by the call option and will buy the 1,000 ounces of gold at the $400/oz specified in the option contract.
b) be obliged to buy gold at the $400/oz specified in the option contract.
c) buy the gold on the spot market at the lower market price of $380/oz.

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