21) The futures price with one year delivery is F0=100, and the risk-free rate is r=4%. It follows that if the normal backwardation hypothesis holds then the expected spot price E(ST) on delivery date should be a) $100 b) $104 c) greater than $100 d) less than $100 22) The futures price with one year delivery is F0=100, and the risk-free rate is r=4%. It follows that if the contago hypothesis holds then the expected spot price E(ST) on delivery date should be a) $100 b) $104 c) greater than $100 d) less than $100 23) The current price of a non-dividend-paying stock is $30. Over the next six months it is expected to rise to $36 or fall to $26. Assume the risk-free rate is zero. An investor sells call options with a strike price of $32. Which of the following hedges the position? 1. Buy 0.6 shares for each call option sold 2. Buy 0.4 shares for each call option sold 3. C. Short 0.6 shares for each call option sold 4. Short 0.4 shares for each call option sold