(a) The current price of gold is USD1,400 per ounce. The forward price for one-year delivery is USD1,500. An arbitrageur can borrow money at a rate of 4% per year. Make the arbitrageur strategy recommendation to your client. (7 marks)

(b) You suggested your friends to invest in Stock Index Futures rather than Stock Exchange. Explain any FOUR (4) benefits of Stock Index Futures (SIF) Contracts to your friends. (12 marks)

(c) Describe how a futures contract can be utilised for speculating or hedging purposes. (7 marks)

(d) The CME Group offers a futures contract on long-term Treasury bonds. Characterize the investors likely to use this contract. (6 marks)