.How can options, futures, and forward contracts be used to devise simple hedging strategies? Discuss similarities and differences between futures contracts and forward contracts.
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3.How can options, futures, and forward contracts be used to devise simple hedging strategies? Discuss similarities and differences between futures contracts and forward contracts.
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- Discuss the difference between forward and futures contracts, focusing on the pros and cons of each.What are the main differences between options and warrant contracts and forward and futures contracts?What is the difference between forward and futures contracts, focusing on the pros and cons of each.
- What is a futures contract? What are the key differences between forward andfutures contracts?Address the similarity and differences between option and forward/futures contracts.“The major difference between futures and options arises from the different obligations of buyers and sellers “ Do you agree? Explain
- What is the contract unit for KLIBOR futures contract?a) Futures contracts and options on futures contracts can be used to modify risk.Required:Identify the fundamental distinction between a futures contract and an option on a futures contract and explain the difference in the manner that futures and options modify portfolio riska) Futures contracts and options on futures contracts can be used to modify risk. Required:Identify the fundamental distinction between a futures contract and an option on a futures contract and explain the difference in the manner that futures and options modify portfolio risk.
- Explain the difference between a put option and a short position in a futures contract.Define the terms, or give short explanations. -futures contract/option -hedge -hedger -hybrid -law of one price -market efficiencyExplain what is meant by forward contracts and futures using examples. List the main advantages / disadvantages for their use.