1. Delta Airlines uses oil as an input for operations, and is therefore exposed to volatile oil prices. Which of the following would be the best way for Delta to hedge against oil price volatility?
a. Short an oil option contract
b. Buy an oil futures contract
c. Short an oil futures contract
2. If you expect an upcoming product announcement by Google (GOOG) to have a large effect on the market, where the market could respond very positively, or very negatively, which of the following strategies might you pursue?
a. Purchase a straddle
b. Sell a straddle
c. Short the stock