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A long hedge using a futures contract is appropriate when a firm has made some forecasts regarding the price of the underlying asset. Which of the following statements, is the most accurate? Select one: a. The price of the underlying asset will increase in the future and the firm expects to sell the underlying asset in the future. O b. The price of the underlying asset will decrease in the future and the firm expects to sell the underlying asset in the future. O c. The price of the underlying asset will increase in the future and the firm expects to purchase the underlying asset in the future. O d. The price of the underlying asset will decrease in the future and the firm expects to purchase the underlying asset in the future. A forward contract, which was previously priced at $38, will expire in 200 days. The risk-free rate is 3% per annum with continuous compounding. Assuming that one year has 365 days and the current stock price is $40 per share, the value of the forward to the short position should be: Select one: O a. $2.62 O b. $2.73 O C. -$2.73 O d. - $2.62 Suppose that a firm wants to lend in 3 months time for a period of 6 months for $1,000,000. The 3-month interest rate is 3% per annum, 6- month interest rate is 5% per annum, and 9-month interest rate is 7% per annum. All rates are continuously compounded. The firm considers using a forward rate agreement (FRA) to hedge its position. Regarding the position, the maturity of the FRA, and the maturity of the loan, which of the following statements is the most accurate? Select one: O a. The firm should sell a FRA, the maturity of the FRA is 3 months, and the loan maturity is 6 months. O b. The firm should buy a FRA, the maturity of the FRA is 3 months, and the loan maturity is 6 months c. The firm should sell a FRA, the maturity of the FRA is 6 months, and the loan maturity is 3 months. O d. The firm should buy a FRA, the maturity of the FRA is 6 months, and the loan maturity is 3 months