It is now October 2021. Your company anticipates that it will purchase 1 million pounds of copper in each of February 2022, August 2022, February 2023, and August 2023. You have decided to use the futures contracts traded by the CME Group to hedge its risk. One contract is for the delivery of 25,000 pounds of copper. The initial margin is $2,000 per contract and the maintenance margin is $1,500 per contract. Your company's policy is to hedge 80% of its exposure. Contracts with maturities up to 7 months into the future are considered to have sufficient liquidity to meet the company's needs. Assume the market prices (in cents per pound) today and at future dates are as in the following table. Date Oct. 2021 Feb. 2022 Aug. 2022 Feb. 2023 Aug. 2023 Spot price 372.00 369.00 365.00 377.00 388.00 Mar. 2022 futures price 372.30 369.10 Sept. 2022 futures price 372.80 370.20 364.80 Mar. 2023 futures price 370.70 364.30 376.70 Sept. 2023 futures price 364.20 376.50 388.20* 'Forecasted by your research department. You have decided to use a stack and roll hedging strategy for the company. 1. Show the strategy that you will implement. 2. What is the initial margin requirement in October 2021? 3. Is the company subject to any margin calls? How did you deduce that? It is now October 2021. Your company anticipates that it will purchase 1 million pounds of copper in each of February 2022, August 2022, February 2023, and August 2023. You have decided to use the futures contracts traded by the CME Group to hedge its risk. One contract is for the delivery of 25,000 pounds of copper. The initial margin is $2,000 per contract and the maintenance margin is $1,500 per contract. Your company's policy is to hedge 80% of its exposure. Contracts with maturities up to 7 months into the future are considered to have sufficient liquidity to meet the company's needs. Assume the market prices (in cents per pound) today and at future dates are as in the following table. Date Oct. 2021 Feb. 2022 Aug. 2022 Feb. 2023 Aug. 2023 Spot price 372.00 369.00 365.00 377.00 388.00 Mar. 2022 futures price 372.30 369.10 Sept. 2022 futures price 372.80 370.20 364.80 Mar. 2023 futures price 370.70 364.30 376.70 Sept. 2023 futures price 364.20 376.50 388.20* 'Forecasted by your research department. You have decided to use a stack and roll hedging strategy for the company. 1. Show the strategy that you will implement. 2. What is the initial margin requirement in October 2021? 3. Is the company subject to any margin calls? How did you deduce that