AAA Oil is an oil refining company. As an oil refiner, it purchases crude oil from drillers and refines the crude into multiple distillates on which it competes with a few other producers.

1. 1. Which exposures does it make sense for AAA to have a Strategic view? Detail the circumstances that would drive AAA to initiate a Strategic hedge.
3. 2. Using Collars, how can AAA hedge these exposures? Detail the transactions.
5. 3. Using Futures contracts, how can AAA hedge these exposures? Detail the transactions.