b) Based on current market, you assume that market will be very bearish. Therefore, you want to take advantage from the distortion price between today and September 2020. You enter the futures market today as in the middle of July 2020, the spot price of CPO is RM1,200 per tonne and spot month, one-month, and two-months in CPO futures market are RM1,320, RM1,350 and RM1,370. Assure cost storage is RM7 per month per tonne, and the risk-free rate is 5%. i) State your strategy based on your fair value of your futures. (4 marks) ii) Compute the profit/loss from this strategy marks) iii) Justify your reasons either cash and carry arbitrage or reverse cash and carry arbitrage is more appropriate with your firm. (4 marks) (3 marks) iv) Do you think arbitrage is the best trading for the trader? Elaborate. b) Based on current market, you assume that market will be very bearish. Therefore, you want to take advantage from the distortion price between today and September 2020. You enter the futures market today as in the middle of July 2020, the spot price of CPO is RM1,200 per tonne and spot month, one-month, and two-months in CPO futures market are RM1,320, RM1,350 and RM1,370. Assure cost storage is RM7 per month per tonne, and the risk-free rate is 5%. i) State your strategy based on your fair value of your futures. (4 marks) ii) Compute the profit/loss from this strategy marks) iii) Justify your reasons either cash and carry arbitrage or reverse cash and carry arbitrage is more appropriate with your firm. (4 marks) (3 marks) iv) Do you think arbitrage is the best trading for the trader? Elaborate