Question: a) John is an arbitrageur, Julia is a hedger and Josie is a speculator. Explain the different trading motives John, Julia and Josie may have

a) John is an arbitrageur, Julia is a hedger and Josie is a speculator. Explain the different trading motives John, Julia and Josie may have in using financial derivatives. (word count = 150)

b) Under which conditions would each of these three different traders choose to short a forward. Explain your answer. (word count = 250)

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