$1.$ Assume the one$-$year T$-$bill rate is $2\mathrm{.}05\%$ and storage is $1\mathrm{.}67\%$ annually. If west Texas intermediate $($WTI$)$ oil futures for eight month$$s delivery is at $$84\mathrm{.}22$ per barrel, and the spot price is $$83\mathrm{.}66$ per barrel, what is the convenience yield for WTI?

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$2.$ What is the hedge ratio for a jeweler trying to hedge inventory of $235$ troy ounces of rhodium, assuming that she uses palladium futures as a hedge. Assume that the r is $\mathrm{.}859$ and the s for palladium is $\mathrm{.}2376$ and the s for rhodium is $\mathrm{.}5730.$

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$3.$ How many contracts would be required to properly hedge a position where the r of two assets is $\mathrm{.}905,$ the s of the asset is $\mathrm{.}0754,$ and the s of the commodity futures contract is $\mathrm{.}1065?$

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$4.$ Normally, futures prices are higher than spot prices for the same commodity. This called:

a$.$ Normalcy

b$.$ Backwardation

c$.$ Forward Discipline

d$.$ Contango

e$.$ Basis

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$5.$ A farmer buys one beanmeal futures contract for May delivery instead of buying beanmeal on the spot market for immediate delivery. What type of hedge is this considered?

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$6.$ A farmer sells twenty wheat futures for September delivery instead of waiting until the crop is harvested, and then selling on the spot market. What type of hedge is this considered?

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$7.$ An airline buys gasoline futures for future delivery, even though the airline uses jet fuel and not gasoline, because jet fuel does not have a futures market. What type of hedge is this considered?

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$8.$ As of April $11,2022$ the dividend yield on the S&P$500$ index is $1\mathrm{.}75\%$ annually, the riskless US interest rate is $1\%$ annually for all maturities. Then, unless arbitrage opportunities arise:

a$.$ The S&P$500$ spot level is lower than the June $2022$ futures price.

b$.$ Longer maturity futures contracts have higher prices than shorter maturity futures contracts.

c$.$ The S&P$500$ spot level is higher than the June $2022$ futures price.

d$.$ The S&P$500$ spot level equals the June $2022$ futures price.

e$.$ None of the above are true.

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$9.$ Consider S&P$500$ index futures contracts traded on CBOE in April $2022.$ The open interest for a June $2022$ contract, when compared to the open interest for the Sept $2022$ contract, is usually:

a$.$ Lower.

b$.$ The same.

c$.$ Equally likely to be higher or lower.

d$.$ Higher.

$10.$Silver futures and spot silver have a correlation factor of $0\mathrm{.}97.$ If the standard deviation for the futures contract is $2\mathrm{.}98$ and the standard deviation for the spot is $1\mathrm{.}87,$ what is the optimum hedge ratio?

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$11.$ Based on the results in Problem $15,$ what is the optimum number of SIL contracts to hedge $5,220$ troy ounces of silver held in inventory? $($Each futures contract represents $1000$ troy ounces $$ SIL is the symbol for Silver Micro$-$contracts$).$