1.1 Devise a hedging strategy for the company. Provide complete justification of various futures positions taken at different dates.

1.2 What is the initial margin requirement in December 2022? Provide complete calculations.

1.3 Is the company subject to any margin calls in April 2023? Explain clearly with detailed calculations.

1.4 What is the margin account balance in October 2024? Explain every step clearly and provide detailed calculations.

Suppose that it is now December 2022. A company anticipates that it will purchase 100,000 ounces of silver in each of April 2023, October 2023, April 2024 and October 2024. The company has decided to use the futures contracts traded by the CME Group to hedge its risk. One contract is for the delivery of 5,000 ounces of silver. The initial margin is 4,000 per contract and the maintenance margin is 3,500 per contract. The company's policy is to hedge 75% of its exposure. Contracts with maturities up to 13 months into the future are considered to have sufficient liquidity to meet the company's needs. Assume that the market prices (in pound sterling per ounce) today and at future dates are as in the following table. Futures positions are marked-tomarket at the future dates given in the table. Do not make any "tailing" adjustment. (Answer ALL parts of this question)