Question 2 a) Suppose that a Ghanaian Bulk Oil Distribution Company (BDC), PetCrude Limited, is expected to import 10 million barrels of crude oil in twelve (12) months. The prevailing exchange rate and price of crude oil are 1$/6.07 GHS and 60 dollars/per barrel, respectively. Further, PetCrude has secured a loan facility in Ghanaian Cedis (to be repaid over the next 60 months) to partly finance the importation. Following the current global trends, it is anticipated oil price will continue to rise, while the Cedi continues to depreciate over the coming months. Further, the Monetary Policy Committee (MPC) of Bank of Ghana has just reduced the monetary policy rate. As the Chief risk officer of the BDC, in the face of the novel Covid-19 pandemic, what are the various risks your company would be exposed to? Design appropriate hedging strategies for each risk type (Hint: Be specific with your hedging strategies and avoid the habit of throwing in unnecessary sentences). [15 marks] b) Explain carefully the difference between selling a call option and buying a put option. Give an example to support your explanations [5 marks] c) A bank's operational risk includes the risk of very large losses because of employee fraud, natural disasters, litigation, etc. Do you think operational risk is best handled by risk decomposition or risk aggregation? [5 marks]