A speculator is bullish on the underlying market price in the near future. Alicia has informed

her broker to trade $80\%$ from his portfolio of RM $2$ million in Kala Lumpur Composite Index

$($KLCI$)$ futures contracts at a price of $928.$ Currently the beta is half volatile than the market.

Suppose that over the next five days, the futures price evolved as follows:

Required:

a$.$ If Alicia bullish on the market, what speculative strategy should she enters? Explain.

b$.$ Calculate the contract value of the CPO futures contract. $($Hint: to round off the

contract number$)$

c$.$ If the initial margin is $10\%$ of contract value and the maintenance margin is $85\%,$

prepare the marked$-$to$-$market.

d$.$ Find the total profit or loss in day $5$ that the trader makes from such speculative trading

if the commission charge is RM$105$ per contract.

e$.$ Is there any margin call? If yes, by how much?

f$.$ Calculate leverage investment for day $3.$

g$.$ Differentiate the margin in cash market and in the futures market.