Derivatives Market:
(a) A company that produces cereals will need to buy corn from the market in 3 months. Propose one financial instrument and the position required (long or short) with which the company can protect from a possible increase in the price of corn.
(b) You have no exposure to the market index but you would like to speculate on your expectation that its level will increase. Compare the following two strategies: (i) Call option on the index and (ii) Futures on the index.