a. Concisely define options and futures, and cite their similarities and differences

b. Assume the existence of a futures market in human blood. The spot price (todays market price) is $200 per pint. (A curious comparison - HP #45 ink cartridges are

$355 per pint.) Your hospital is concerned about rising blood prices because competition and regulation prevents it from passing the cost along to patients. Explain how to use futures as a hedge against increases in the price of human blood.