It is March and Alberta Oil Refinery Ltd (AOR) has enough crude oil in inventory to continue refinery operations until September. AOR expects to need to purchase 400,000 barrels of oil in September. Management at AOR is concerned about oil price volatility. Futures contracts for September delivery are available with a futures price of $120 per barrel. Options contracts with a strike price of $120 and expiration in September are also available; puts cost $28 and calls cost $20. Complete parts (a) through (e). a. Describe how AOR can fully hedge using oil futures contracts. A. AOR can wait until prices rise in the future. B. AOR can hedge by taking an intermediate position in futures for 400,000 barrels of oil for September delivery. C. AOR can hedge by taking a long position in futures for 400,000 barrels of oil for September delivery. D. AOR can hedge by taking a short position in futures for 400,000 barrels of oil for September delivery. b. Given the strategy in part (a), what will be the total net amount paid by AOR (for all 400,000 barrels) if the price of oil in September is (i) $70 per barrel, (ii) $120 per barrel, and (iii) $170 per barrel? i. At $70 per barrel. the total net amount paid by AOR is $ million. ii. At $120 per barrel, the total net amount paid by AOR is $48 million. iii. At $170 per barrel, the total net amount paid by AOR is $ million. (Round your answers to the nearest whole number.) c. Describe how AOR can fully hedge using options. A. AOR can sell the call options on 400,000 barrels of oil. B. AOR can sell the put options on 400,000 barrels of oil. C. AOR can purchase the put options on 400,000 barrels of oil. 'D. AOR can purchase the call options on 400,000 barrels of oil. d. Given the strategy in part (c), what will be the total net amount paid by AOR (for all 400,000 barrels) if the price of oil in September is (i) $70 per barrel, (ii) $120 per barrel, and (iii) $170 per barrel? i. At $70 per barrel, the total net amount paid by AOR is $ million. ii. At $120 per barrel, the total net amount paid by AOR is $ milion. iii. At $170 per barrel, the total net amount paid by AOR is $ million. (Round your answers to the nearest whole number.)