Suppose you enter into a future contract to sell 50 metric tonnes of CPO for RM1,250 per metric tonne. The initial margin is 10% of contract amount and the maintenance margin is RM5000.

a) Compute price change that would lead to a margin call.

b) Explain what will happen if you do not meet the margin call.

c) If the price increase to RM1,270 in day 5, show the leverage effect if you close out your position at that price.