Question 2 (30 marks) SOXoil produces vegetable based cooking oil and butter spreads. SOXoil uses large quantities of crude palm oil (CPO) in its production process as a main raw material. It is April 2023 now and SOXoil estimates a need of 25,000 metric tons (MTs)of CPO in December 2023. Current spot price of CPO is RM2200 per MT. You as the procurement manager of SOXoil, have the following alternatives to hedge the possible increase in the CPO price by December 2023: a. The analysist predicts that the CPO will be trading at RM2800 per MT in December 2023. b. Forward contracts on CPO for December 2023 delivery is available at RM3000 per MT. c. December 2023 Futures contract on CPO(FCPO) is available and currently trading at RM2380 per MT. (FCPO has a contract specification of 25 metric tons per contract). What would be your net purchase price in December 2023 if the CPO closing price in December 2023 is RM3100 per MT? Justify whether this is a perfect hedge? d. European Options on September 2023 CPO is available at the following prices: You are required to evaluate each hedge alternative carefully and suggest the best hedge strategy or would you decide to remain unhedged. Your answer should include a careful cost and benefit analysis for each hedge alternative and justify your selection in terms of its certainty and effectiveness