Question: 3. A) An option contract is a superior derivative contract than a forward contract - Explain with example. B) Under each condition stated below what

3. A) An option contract is a superior derivative contract than a forward contract - Explain with example. B) Under each condition stated below what should be the steps taken by each individual at maturity to get the maximum benefit (Assume premium on option contract is zero): Situation On maturity date A firm buys a put option of US $ to hedge its open position Strike price > Spot rate of US$ An international bidder buys a call option on C $, afterwards his bid was Strike price > Spot rate of C$ rejected A speculator purchases a future contract to sell US $ Exercise price >Spot rate of US $

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