Propose TWO option combination strategies that involve more than one option

contract for the USD variable rate loan (USD 20m), for all relevant risks

faced by this portfolio. OceanaGolds management has expressed a desire to

retain some of the upside benefits that hedging with options can permit but

without paying a lot of money in option premiums. That is, your recommended

strategies should provide a reasonably effective hedge but keep the option

premium payment limited to a reasonable amount (it does not have to be zero!).

As the strategist, it is up to you what you consider reasonable for this purpose.

You must also describe the benefits and possible shortcomings of your proposed

option strategies. You must use actual option data to illustrate your option

strategies and to hypothetically demonstrate their benefits and shortcomings.

Calculate the number of contracts required for each strategy and provide the

strike prices and total premium costs.