Answer the following questions based on the prices of Future Crude Palm Oil (FCPO) quoted on...
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Answer the following questions based on the prices of Future Crude Palm Oil (FCPO) quoted on Bursa Malaysia dated 17th June 2021: O Navigate the title to find out more. NO 1 1 ▼ FCPO 2 3 ▼ FCPO BURSA MALAYSIA 5 FCPO 8 6 FCPO 9 7 FCPO 10 FCPO 11 12 FCPO 13 ♥ FCPO FCPO A FCPO ▼ FCPO A FCPO FCPO NAME MONTH Jul 2021 Aug 2021 Sep 2021 Oct 2021 Nov 2021 Dec 2021 Jan 2022 Feb 2022 Mar 2022 Apr 2022 May 2022 Jun 2022 Jul 2022 OPEN 3,510.00 3,405.00 3.333.00 3,315.00 3,322.00 3,314.00 3.330.00 3,330.00 3.326.00 3.344.00 3.352.00 3.332.00 BID Market Information Trade Listing Regulation Reference About Bursa 3,506.00 3,411.00 3,356.00 3,324.00 3.321.00 3,321.00 3,333.00 3,335.00 3,320.00 3,314,00 ASK 3,303.00 3,510.00 3,416.00 3,357.00 3,327.00 3,323.00 3,323.00 3,318.00 3,311.00 3,297.00 3.305.00 LAST DONE 3,283.00 3,303.00 3,415.00 3,505.00 -61.00 3,573.00 3,356.00 3,334.00 3,323.00 3,334.00 3,325.00 3,330.00 3,330.00 3,315.00 3,376.00 3,315.00 CHANGE 3.333.00 3,280.00 3,298.00 3,300.00 -49.00 -48.00 -53.00 -59.00 49.00 -46.00 -55.00 -16.00 -36.00 3,334.00 +5.00 HIGH -47.00 3,399.00 -7.00 3,498.00 3,452.00 3,414.00 3,403.00 3,431.00 3,310.00 3,395.00 3,385.00 LOW 3.490.00 3.389.00 3,335.00 3,327.00 28,517 3,330.00 3,330.00 3,311.00 5,851 3,315.00 3,376.00 3,344.00 3,314.00 2,460 3,356.00 3,315.00 VOL 3.334.00 3,332.00 1,028 15,492 5,747 3,300.00 10,148 1,222 679 558 209 225 7 DI 55 35.760 29.116 26.829 62.068 3,404.00 17.021 9.055 2.682 1.615 5.584 27 SETT. POCE|| 2.127 3,566.00 3,464.00 3,387.00 3,384.00 3,379.00 3,377.00 3,380.00 3,370.00 3,360.00 3,351.00 3,329.00 3,307.00 a. Analyse the price of the Future Crude Palm Oil (FCPO) and conclude the trend of the market prices for the next six months. How do you relate to what you observed in the prices and the function of derivatives? (6 marks) b. If a Crude Palm Oil Producer sells CPO futures, is that hedging or speculating? Support your answers with the primary motives for a hedger and a speculator in the derivatives market. (6 marks) c. Illustrate how a manufacturer who has an ongoing need for Crude Palm Oil as a raw material in the production process might use futures to hedge. What does the manufacturer hope to gain? (7 marks) d. Discuss why speculators of Crude Palm Oil have the riskiest position as compared to spreaders and arbitrageurs? (6 marks) Answer the following questions based on the prices of Future Crude Palm Oil (FCPO) quoted on Bursa Malaysia dated 17th June 2021: O Navigate the title to find out more. NO 1 1 ▼ FCPO 2 3 ▼ FCPO BURSA MALAYSIA 5 FCPO 8 6 FCPO 9 7 FCPO 10 FCPO 11 12 FCPO 13 ♥ FCPO FCPO A FCPO ▼ FCPO A FCPO FCPO NAME MONTH Jul 2021 Aug 2021 Sep 2021 Oct 2021 Nov 2021 Dec 2021 Jan 2022 Feb 2022 Mar 2022 Apr 2022 May 2022 Jun 2022 Jul 2022 OPEN 3,510.00 3,405.00 3.333.00 3,315.00 3,322.00 3,314.00 3.330.00 3,330.00 3.326.00 3.344.00 3.352.00 3.332.00 BID Market Information Trade Listing Regulation Reference About Bursa 3,506.00 3,411.00 3,356.00 3,324.00 3.321.00 3,321.00 3,333.00 3,335.00 3,320.00 3,314,00 ASK 3,303.00 3,510.00 3,416.00 3,357.00 3,327.00 3,323.00 3,323.00 3,318.00 3,311.00 3,297.00 3.305.00 LAST DONE 3,283.00 3,303.00 3,415.00 3,505.00 -61.00 3,573.00 3,356.00 3,334.00 3,323.00 3,334.00 3,325.00 3,330.00 3,330.00 3,315.00 3,376.00 3,315.00 CHANGE 3.333.00 3,280.00 3,298.00 3,300.00 -49.00 -48.00 -53.00 -59.00 49.00 -46.00 -55.00 -16.00 -36.00 3,334.00 +5.00 HIGH -47.00 3,399.00 -7.00 3,498.00 3,452.00 3,414.00 3,403.00 3,431.00 3,310.00 3,395.00 3,385.00 LOW 3.490.00 3.389.00 3,335.00 3,327.00 28,517 3,330.00 3,330.00 3,311.00 5,851 3,315.00 3,376.00 3,344.00 3,314.00 2,460 3,356.00 3,315.00 VOL 3.334.00 3,332.00 1,028 15,492 5,747 3,300.00 10,148 1,222 679 558 209 225 7 DI 55 35.760 29.116 26.829 62.068 3,404.00 17.021 9.055 2.682 1.615 5.584 27 SETT. POCE|| 2.127 3,566.00 3,464.00 3,387.00 3,384.00 3,379.00 3,377.00 3,380.00 3,370.00 3,360.00 3,351.00 3,329.00 3,307.00 a. Analyse the price of the Future Crude Palm Oil (FCPO) and conclude the trend of the market prices for the next six months. How do you relate to what you observed in the prices and the function of derivatives? (6 marks) b. If a Crude Palm Oil Producer sells CPO futures, is that hedging or speculating? Support your answers with the primary motives for a hedger and a speculator in the derivatives market. (6 marks) c. Illustrate how a manufacturer who has an ongoing need for Crude Palm Oil as a raw material in the production process might use futures to hedge. What does the manufacturer hope to gain? (7 marks) d. Discuss why speculators of Crude Palm Oil have the riskiest position as compared to spreaders and arbitrageurs? (6 marks)
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