Give reason why choice the option (a) In the absence of market imperfections, which of the following values is greater? 1. The one-year forward price, discounted by the riskless interest rate. 2. The expected spot price in one year, discounted by the relevant risky discount rate. 3. The values in 1 and 2 are the same. 4. The value in either 1 or 2 could be greater depending on the level of carrying costs. (b) The basis risk associated with unwinding a futures hedge prior to expiration is usually thegreatest for futures contracts on which of the following assets? 1. Treasury bonds. 2. Silver. 3. Canadian dollars. 4. Heating oil. (c) Consider a buyer of heating oil who wants to cap its purchase price. Which of the followingcan be structured to have zero upfront cost (may be more than one correct answer)? 1. A price cap. 2. A price collar. 3. A protected collar. 4. A participating collar