Please explain on why that is the answer? Im trying to comprehend it.

A pension fund manager who plans on purchasing bonds in the future: a. Wants to insure against the price of bonds falling. b. Can offset the risk of bond prices rising by selling a futures contract. C. Will take the long position in a futures contract. d. Will take the short position in a futures contract.

A wheat farmer who must purchase his inputs now but will sell his wheat at a market price at a future date: a. Faces a market risk that cannot be offset. b. Is a good example of what the chapter refers to as a speculator. C. Would hedge by taking the short position in a wheat futures contract. d. Would hedge by taking the long position in a wheat futures contract.

A baker of bread has a long-term fixed-price contract to supply bread. Which of the following would NOT reduce her risk? a. Taking the long position in wheat futures contract. b. Hedging this risk in the wheat futures market. c. Finding a wheat farmer who will take the short position in a wheat futures contract. D. Finding a wheat farmer who will take the long position in a wheat futures contract.

There is a futures contract for the purchase of 100 bushes of wheat at $2.50 per bushel. If the market price of wheat increases to $3.00 per bushel: a. The buyer (long position) needs to transfer $50 to the seller (short position). B. The seller (short position) needs to transfer $50 to the buyer (long position). c. Nothing happens since with a futures contract all payments are made at the settlement date. d. Nothing happens since marked to market adjustments only take place when the market price falls below the contract price.

14. (p. 199) There is a futures contract for the purchase of 1000 bushels of corn at $3.00 per bushel. If the market price of corn falls to $2.50: A. The buyer (long position) needs to transfer $500 to the seller (short position). b. The seller (long position) needs to transfer $500 to the buyer (short position). c. Nothing happens since marked to market adjustments only occur if the market price rises above the contract price. d. Nothing happened since no funds are transferred until the settlement date.