1. For what specific situation would hedging with a long position on Treasury bond futures contract be helpful? For what specific situation would a hedging with a short position on natural gas futures be helpful? Please explain in detail.
2. George Jefferson established a trust fund that provides $168,500 in scholarships each year for worthy students. The trust fund earns a 4 percent rate of return. How much money did Mr. Jefferson contribute to the fund assuming that only the interest income is distributed?