1. A short call position can be created from forwards and options over the same stock, with the same expiry date, and where the forward price is equal to the strike price of the options, using:

a. a short forward and long put.

b. a short forward and short put.

c. a long forward and long put.

d. a long forward and short put.

2. A firm that will issue 6-year bonds in 6-months' time may hedge this exposure by taking:

a. A long position of greater value in 3-year treasury futures.

b. A long position of lower value in 3-year treasury futures.

c. A short position of greater value in 3-year treasury futures.

d. A short position of lower value in 3-year treasury futures.

3. The convenience yield is likely to be high when:

a.a commodity faces low spot demand and expected future under-supply.

b.a commodity faces high spot demand and expected future over-supply.

c.an investment asset faces low spot demand and expected future under-supply.

d.an investment asset faces high spot demand and expected future over-supply.

4.The spot price remains the same, but the convenience yield increases unexpectedly. Which of the following is true for a hedger with a short forward position?

a. their forward position improves.

b.their forward position worsens.

c.their forward position sometimes worsens and sometimes improves.

d.their forward position stays the same.