Some other questions from my tutorials

QUESTION 1 (JUNE 2019) _(12 MARKS) As a professional trader of a leading palm oil refiner, you observe that Crude Palm Oil (CPO) prices are expected to increase steadily between today (early July 2019) and later (early September 2019). Currently, CPO prices in the cash market are trading at RM1760 per metric tonne (MT) while in the Bursa Malaysia Derivatives Berhad (BMDB) are quoting at RM1725, RM1738, RM1747 and RM1755 for spot month, one-month, two-months and three-months forward, respectively. In anticipation of rising CPO prices, you plan establish a hedge strategy to meet your raw material requirement for 5,000 MT of CPO in September 2019. In early September 2019, the price has falling unexpectedly to RM1735 in the cash market and RM1712, RM1705, RM1692 and RM1688 for spot month, one-month, two-months and three months forward in the futures market. Required: Show by quantitatively your hedge benefits. (9 marks) (CLO2:PLO5:C2) ii. Do you think you achieve your price objective? Explain. (3 marks) (CLO2:PLO5:C2)QUESTION 3 (SEPT/OCT 2019) (16 MARKS) A speculator long 10 April Crude Palm Oi futures (FCPO) contract for RM3,220 per metric tonne (MT). Suppose that over the next five days, the futures price evolved as follows: Day Settlement Price 1 RM3305 2 RM3388 3 RM3265 4 RM3110 5 RM3345 On the fifth day, the trader decides to liquidate his position at RM3345 per MT. Required: i. Calculate the contract value of the CPO futures contract. (2 marks) (CLO2:PLO2:C4) i. If the initial margin is 10% of contract value and the maintenance margin is 75%, show the margin balance of the trader's account. (6 marks) (CLO2:PLO2:C3) iii. Find the total profit or loss that the trader makes from such speculative trading if the commission charge is RM100 per contract. (4 marks) (CLO2:PLO2:C3) iv. Is there any margin call? If yes, by how much? (2 marks) (CLO2:PLO2:C4)