Jkerk Company began operations in 2018. Since then, it has reported the following gains and losses for its investments in trading securities on the income statement: 2018 2019 2020 Gain (loss) from sale of trading investments $18,000 $(24,000) $16,800 Unrealized holding loss on valuation of trading investments Unrealized holding gain on valuation of trading investments (30,000) (36,000) 12,000 At January 1, 2021, Jkerk owned the following trading securities: Cost VLF Ordinary (18,000 shares) $540,000 KTG Preference (2,400 shares) 252,000 Xtslr Convertible bonds (120 bonds) 138,000 During 2021, the following events occurred: 1. Sold 6,000 shares of VLF for $204,000. 2. Acquired 1,200 ordinary shares of Guolp for $40 per share. Brokerage fees totaled $1,000. At 12/31/2021, the fair values for Jkerk's trading investments were: Price Investment VLF Ordinary KTG Preference $28 per share $110 per share Xtslr Bonds $1,020 per bond Guolp Ordinary $42 per share Required a. Prepare a schedule to show the balance in the Fair Value Adjustment at December 31, 2020 (after the adjusting entry for 2020 is made). (4 marks) b. Prepare a schedule which shows the aggregate cost and fair values for Jkerk's trading investments portfolio at 12/31/2021. (5 marks) c. Prepare the necessary adjusting entry based upon your analysis in b above. d. Explain what is derivative and why speculators and arbitrageurs use derivatives. (4 marks) (8 marks) e. Explain how derivatives can be adopted for hedging purposes and provide examples. (4 marks)