Calculation of impact of FRA for interest rate increase and decrease 2
Decision to go long on futures 1
Selection of March futures and options 1
Unexpired basis calculation 1
Impact of interest rates increase/decrease with futures 3
Decision to buy call options 1
Impact of interest rates increase/decrease with options 5
Discussion (up to 2 marks available for general explanation of the products’ features) 5–6

Max marks 19