2. (3 points) "...brought wholesale electricity prices down approximately 30%. These pressures caused several counterparties to default on their long term purchase agreements." In what way are long term price agreements similar to forward contracts? Was AES's long term price contracts equivalent to going long or short a forward contract on electricity? What may be an alternative to using long term price contracts to hedge AES's exposure to fluctuations in electricity prices? Is this alternative viable? 2. (3 points) "...brought wholesale electricity prices down approximately 30%. These pressures caused several counterparties to default on their long term purchase agreements." In what way are long term price agreements similar to forward contracts? Was AES's long term price contracts equivalent to going long or short a forward contract on electricity? What may be an alternative to using long term price contracts to hedge AES's exposure to fluctuations in electricity prices? Is this alternative viable