a. For investors and borrowers considering setting up a risk management strategy using Futures Contracts, there is a basic rule that determines the timing of the various buy/sell transactions. Specify and explain this rule, giving examples from an investors and a borrowers viewpoint.

b) Anna bought an option contract on Telstra shares with an exercise price of $60 and an expiry date in one month. The market price for Telstra shares today is $57.21. The call price is trading at $0.25.

i. Calculate the break-even amount for the call position and draw a fully labelled diagram for both buyer of the option and seller of the option

ii. At what minimum share price will the option buyer exercise the option on the expiration date? Provide reasoning in your answer.