Short questions and definitions. Briefly define the following objects or terms (at most 100one sentence) and provide examples if necessary:

(f) Why do shareholders always have a preference for continuing operations rather than 10 liquidating a company which is in or headed for insolvency?

(g) Why do bondholder prefer less risk but shareholds prefer more? 10

(h) Define a futures contract and explain the principal difference between a futures and a 10 forward contract.

(i) What is the principal contractual difference between an option and a forward contract? 10

1. (j) Define an American put and explain how it differs from a European one. 10