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You are a futures trader in an international hedge fund and predicted that Crude Palm Oil (CPO) price will drop for the next few months

You are a futures trader in an international hedge fund and predicted that Crude Palm Oil (CPO) price will drop for the next few months due to oversupply in production. In view of the above, you decided to allocate RM100,000 to invest (long/short) the CPO futures. a) Discuss the application of commodity futures in hedging, arbitraging, and speculating. (20 marks)

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