a) Illustrate three (3) benefits that speculators bring to derivative market. In what way might some of their activities might hurt markets? (4 marks)

b) If the main difference between a forward and futures contract is that futures are standardized and market traded, outline four (4) main advantages in futures contracts superiority against forward contracts. (4 marks)

c) Distinguish four (4) benefits of transacting in FBM KLCI futures (FKLI) over stock market transactions. (4 marks)

d) Arbitrage is an essential economic activity that keeps markets 'correctly' priced and contributes to the efficiency of financial markets. Explain this statement with reference to the crude palm oil futures (FCPO) market. (4 marks) e) In your own words, illustrate what is meant by 'anticipatory hedging' in the context of the 3-month Kuala Lumpur Interbank Offered Rate futures market (FKB3). (4 marks)