Risk management based on contracts ppose you are an investor in oil, and you would like to speculate on a futures contract for 12 rrels of oil to be delivered one week from today. You have no physical oil and have no desire hold physical oil. The price of oil today is $99 / barrel. The price of a futures contract for oil xt week is currently $102 / barrel, but you believe that the price of oil next week will be $93 / rrel. Your cost of capital is 10% (per year). 6a) The market is said to be in i) Contango ii) Backwardation 6b) For your futures contract, you prefer to: i) Go long ii) Short sell 6c) Now, suppose you made your futures contract according to part b (so, you either went long or sold short). The price of oil one week from the making the contract is $100. How much profit or loss did you incur from this contract? 6d) Would your answer to part b change if the contract were for one year, rather than one week? Why or why not? Risk management based on contracts ppose you are an investor in oil, and you would like to speculate on a futures contract for 12 rrels of oil to be delivered one week from today. You have no physical oil and have no desire hold physical oil. The price of oil today is $99 / barrel. The price of a futures contract for oil xt week is currently $102 / barrel, but you believe that the price of oil next week will be $93 / rrel. Your cost of capital is 10% (per year). 6a) The market is said to be in i) Contango ii) Backwardation 6b) For your futures contract, you prefer to: i) Go long ii) Short sell 6c) Now, suppose you made your futures contract according to part b (so, you either went long or sold short). The price of oil one week from the making the contract is $100. How much profit or loss did you incur from this contract? 6d) Would your answer to part b change if the contract were for one year, rather than one week? Why or why not