In the first part you need to build a hedge using two products: 1)Futures contract 2)options on futures contract (2 separate complete hedges). I need the details of each of the hedges, screenshots of the actual products, the price and if I’m going short or long (what you are buying, what you are selling). After the hedge is done, discuss whether is makes sense or not to do the hedge (you have to do the hedge as required by the board of directors but after that, criticize their decision which means figure out where the price of oil is going in the next six months).
The second part: compare 3 products: ETF, index/sub-index, and Mutual fund. Compute the compounded annual returns of these 3 assets and in the end whats best to invest in. PLEASE READ THE ATTACHED FILE (IT HAS THE DETAILED REQUIREMENTS) I want the report to MATCH the two questions EXACTLY PLEASE.

1- Futures contracts and Options on Futures (15 points)

You are the administrator of an oil-drilling platform with a monthly production of 500,000 barrels of light sweet crude (WTI). The board of directors of your company has suggested that you use derivatives products to fix the sale price of the oil you are producing for the next six months (Jan – June 2017) so they can prepare forecasted financial statements. Your proposal must include the three following sections:

1. Details of a potential hedge using live futures contracts only (how many, which contracts, delivery date, etc.) the total cost (if any) and the potential risks.

2. Details of a separate, potential hedge using live options on futures contracts (how many, which contracts, delivery date, etc.), the total cost (if any) and how the potential risks.

3. Once you have completed both hedges, provide your estimate of the necessity (or not) to hedge oil production for the next six months using either/or fundamental / technical analysis (or both, as you wish). Do you consider it wise to hedge under the present and expected market conditions? Be convincing, there are large sums depending on this decision (screen captures for all data please…)

2- Investments and returns (10 points)

Choose three similar products; an ETF (other than SPY, QQQ or DIA) that replicate an index/sub-index and a corresponding commercial mutual fund. You will then have three products that should have the same net return since they roughly represent the same investment. Provide the details for each asset (type, fees, supplier, etc., but don’t bother with the list of holdings!). Compare the compounded annual return of the three products (remove the yearly fees!) for the period covering the past 3 years and provide a conclusion – which asset of the three was the best investment for an individual?