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Trader A and Trader B enter different types of contracts at time 0 , both types of contracts have the same underlying asset and the

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Trader A and Trader B enter different types of contracts at time 0 , both types of contracts have the same underlying asset and the same maturity date. The following graph shows the profits on the contracts at the maturity date (in one year's time). Use this profits graph to answer the following questions, and fill your answers on the right-hand side of the screen: Trader A Trader B For Trader A and Trader B, respectively: 1. What type of contracts (derivatives) does each trader enter into? (1 marks) 2. What is the position on each contract (i.e. long or short)? (1 marks) For Trader A and Trader B, respectively: 1. What type of contracts (derivatives) does each trader enter into? (1 marks) 2. What is the position on each contract (i.e. long or short)? (1 marks) 3. If both traders are hedgers, what are their expectations of the asset price movement? (No explanation is required.) (2 marks) 4. If both traders are speculators, what are their expectations of the asset price movement? (No explanation is required.) (2 marks)

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