Question: Q4: Derivatives (5 marks) A) What are the differences and similarities between futures contracts and options? Give examples of the main use of forward contracts?

Q4: Derivatives (5 marks) A) What are the differences and similarities between futures contracts and options? Give examples of the main use of forward contracts? What are the major futures contracts in the Australian futures markets?

B) Whats the difference between option buyers and option writers? Draw and explain the payoffs for call and put option writers.

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