You think that the dollar will appreciate against the euro from $1.21/ to $1.05/ during the next year, but you dont want to lose a lot of money if you are wrong and the dollar depreciates.

a. Draw payoff profiles for buying and selling a futures contract, a put, and a call (6 diagrams). Explain briefly what each one requires or allows you to do.

b. Which of these 6 should you definitely not do if you believe the dollar will appreciate?

c. What are the advantages and disadvantages of the others?