If the November spot price is less than $40, the long-hedger could have obtained the oil a lower price by waiting until November and purchasing in the spot market. The consequences of the absence of such opportunities are then equally difficult to determine. Gucci Outlets Bern Switzerland. Only if a fall in interest rates, sufficient to outweigh the term premia, is expected would the yield curve display a negative slope. Gucci Hysteria Medium Top Handle Bag. Swaps could then be interpreted as a vehicle designed to exploit such opportunities; that is, instead of assuming that arbitrage opportunities are absent, swaps contribute to the process by which such opportunities are competed away. Gucci Outlets Bern Switzerland. Hence, section 15.3 pursues the analysis further by deriving the degree of hedging needed to minimize risk. Gucci Hysteria Embroidered Clutch. When the contract expires, the client wins or loses according to the observed value of the index at that date. Gucci Outlets Bern Switzerland. Although all investors may act as if they have iso-elastic utility, this does not in itself imply that H is the same for everyone, for there may exist differences across investors in wealth and other sources of income as well as the parameter y.13 A multiplicity of H values would make the theory difficult to apply.