Outline the appropriate derivative strategy. (Carefully state the contract that should be used maturity and number of contracts where necessary). Vesawit Bhd, a producer of palm oil based cooking oil, would have to replenish its inventory of CPO in 3 months. It normally purchases about 250 tonnes every 3 months.

1. A speculator expects interest rates to rise over the next 3 months.

2. A trader has just been quoted 95.3 points for the 3-month KIBOR futures contract. Using

3. IFR, he has just determined that the correct quote should be 94.80.

4. Currency futures and options are available on Korean Won. A Malaysian importer has just received a shipment of refrigerators from LG of South Korea. The invoice amount is 30 million Won, payable in 90 days.

5. A speculator is bullish about the Malaysian stock market and the KLSE CI. However, he wants to establish a position that will limit his risk.

6. A specialty chemical firm has just received 200kgs of pure silver. It will use the silver over the next 6 months. The company is worried that the silver prices may come down. Its output price varies with the spot price of silver. Both options and futures contracts are available on silver at a contract size of 20 kgs per contract.