Why would you expect this situation to qualify for hedge accounting?

Why should this hedge be accounted for as a fair$-$value hedge instead of as a cash$-$flow hedge?

What entries should be made on May $1,2016,$ to account for the firm commitment and the option?

Assume that the market price for Grade A silver is $$15$ per troy ounce on December $31,2016.$ What are the required entries?

Assume that the market price of Grade A silver is $$13\mathrm{.}8$ per troy ounce on February $1,2017,$ when Ins receives the silver from Sil. Prepare the appropriate journal entries on February $1,2017.$