Suppose TechNO Ltd$.$ is a South African company that imports computers and other IT$-$related products from the US$.$ On $1$ April $2024,$ TechNO Ltd$.$ Placed an order for $1500$ laptops with a supplier in Los Angeles at a purchase price of USD$650$ per laptop. The computers will arrive in Johannesburg on $1$ June $2024$ and full payment of the purchase amount will then be made. TechNO Ltd$.$ decides to hedge its currency exposure by using currency futures contracts for the USD. USD futures contracts are available at the JSE derivatives market in a contract size of USD$1000.$

The following three USD futures contracts $($priced as USD$/$ZAR$)$ are available for trading at the JSE on $1$ April $2024$:

$$ USD futures contract $($expiry date on $15$ June $2024)$: USD$/$ZAR: $18\mathrm{.}9525$

$$ USD futures contract $($expiry date on $15$ September $2024)$: USD$/$ZAR: $19\mathrm{.}1225$

$$ USD futures contract $($expiry date on $15$ December $2024)$: USD$/$ZAR: $19\mathrm{.}8525$

$$ Notes: $-$ For USD futures contracts, the initial margin deposit is R$450$ per contract. $-$ The futures prices listed above are quoted as a single price and not a bid$-$offer spread.

$1\mathrm{.}1$ TechNO Ltd$.$ must decide if the hedge position for the USD will be long or short. Explain which position $($long or short$)$ must be taken and why.

$1\mathrm{.}2$ Which futures contract will be best to use, and why?

$1\mathrm{.}3$ Given your answer above, explain what purchase amount $($in ZAR$)$ TechNO Ltd$.$ would be able to budget for in terms of this import transaction.

$1\mathrm{.}4$ How many futures contracts should be bought$/$sold by TechNO Ltd$?$ Explain.

$1\mathrm{.}5$ Based on your answer above explain what the initial margin deposit $($in ZAR$)$ will be that TechNO Ltd$.$ must make with its derivatives market broker.

$1\mathrm{.}6$ Illustrate $($i$.$e$.,$ draw a futures payoff graph$)$ to explain the futures position of TechNO Ltd$.$ as initiated on $1$ April $2024$

$2.$ Suppose it is $1$ June $2024,$ the laptops arrived in Johannesburg and payment is made. Suppose that the USD futures contracts at the JSE trade at the following exchange rates on $1$ June $2024$:

$$ USD futures contract $($expiry date on $15$ June $2024)$: USD$/$ZAR: $19\mathrm{.}5525$

$$ USD futures contract $($expiry date on $15$ September $2024)$: USD$/$ZAR: $19\mathrm{.}9225$

$$ USD futures contract $($expiry date on $15$ December $2024)$: USD$/$ZAR: $20\mathrm{.}2525$

Calculate the cumulative profit$/$loss in the margin account of TechNO Ltd$.$ on $1$ June $2024,$ given the futures contract position it initiated on $1$ April $2024.$ Explain in detail.