1. Given the information below, calculate the correct price for the September FBM KLCI futures contract (FKLI) and determine whether the FKLI is overpriced or under priced. (assume 4 months to September contract maturity)

Sept FKLI contract = 1551.5, FBM KLCI index = 1543.4, risk free rate = 3%, and dividend yield = 0%

a. $1,558.68 under priced.

b. $1,566.86 overpriced.

c. $1566.86 under priced.

d. $1,558.68 overpriced.

2.

Suppose the spot price for crude palm oil is quoted at $7,000 per metric ton. The annualized risk free is 5% and the annual storage cost per ton is $105. What is the fair value of a FCPO contract maturing in 3 months time?

a. $7,060.46

b. $175,755.75

c. $176,511.55

d. $7,030.23

3.

FGV Holdings Berhad shorted FCPO contracts for 500 tons at $7,000 per ton. The exchange requires FGV to post $200,000 as initial margin. If the maintenance margin is $184,000, what is the FCPO price that could lead to $30,000 being credited to FGV's margin account?

a. $6,940

b. $3,440

c. $6,970

d. $6,880