Ahmad, an institutional investor finds it difficult to find the desired bond from the secondary cash market. On February 19, 2021, he needs RM10 million of MGS but realizes the physical bond market for that day is extremely illiquid. As an alternative to holding the physical bond, he opts to use the 5-year MGS futures contract. However, after 2 weeks, the physical bond becomes available in the secondary market and the institutional investor jumps at the opportunity. Currently, the price of the MGS is at 114, while February MGS futures is at 113.25. According to an analyst, the interest rate is expected to decline in the coming months making MGS more expensive. As an investor with an intention to hold a long MGS portfolio, Ahmad decides to hedge his position to overcome the risk of buying higher-priced MGS. As expected, interest rate declines and MGS price increases to 115 later that February. A similar move takes place in the MGS futures market resulting in the MGS futures to increase to 114.25. Clearly outline the strategy the investor undertakes, determine the net effect of its positions and comment on the outcome. (10 marks) Ahmad, an institutional investor finds it difficult to find the desired bond from the secondary cash market. On February 19, 2021, he needs RM10 million of MGS but realizes the physical bond market for that day is extremely illiquid. As an alternative to holding the physical bond, he opts to use the 5-year MGS futures contract. However, after 2 weeks, the physical bond becomes available in the secondary market and the institutional investor jumps at the opportunity. Currently, the price of the MGS is at 114, while February MGS futures is at 113.25. According to an analyst, the interest rate is expected to decline in the coming months making MGS more expensive. As an investor with an intention to hold a long MGS portfolio, Ahmad decides to hedge his position to overcome the risk of buying higher-priced MGS. As expected, interest rate declines and MGS price increases to 115 later that February. A similar move takes place in the MGS futures market resulting in the MGS futures to increase to 114.25. Clearly outline the strategy the investor undertakes, determine the net effect of its positions and comment on the outcome. (10 marks)