Question 3 a. Qatar Airways is one of few airlines continuing to maintain scheduled commercial passenger services during the COVID-19 Pandemic. Thus Qatar expects to purchase two million gallons of jet fuel in six months. What risk exposure does Qatar have? What position should it take if Qatar wants to use heating oil futures to hedge the exposure? b. The heating oil futures contract size is 42,000 gallons per contract. The standard deviation of jet fuel is 0.14 and the standard deviation of heating oil is 0.13. The correlation between jet fuel and heating oil futures is 0.9049. How many heating oil futures contracts does Qatar Airway needs to achieve the optimal hedging? Assuming no tailing adjustments? (Use the information in both part (a) and (b) for the calculation) c. A trader buys two April futures contracts on WTI crude oil. Each contract is for the delivery of 1000 barrels of crude oil. The current futures price is $32.96 per barrel, the initial margin is 11,200 per contract and the maintenance margin is $9000 per contract. What price change would lead to a margin call? When could the trader withdraw $1000 from the margin account?