Question: a) Discuss at least three (3) reasons why a responsible equity portfolio fund manager would use futures and option contracts. b) If you had sold

a) Discuss at least three (3) reasons why a responsible equity

a) Discuss at least three (3) reasons why a responsible equity portfolio fund manager would use futures and option contracts. b) If you had sold 1 Dec FKLI at 1855, what is your loss or gain (in RM) when FBM KLCI closes at 1800 level at the end of the month after taking into account transaction cost Of RM30 and settlement cost of RM1? Illustrate the profit/loss payoff diagram for this strategy; please label the axes and the breakeven points (including 1800 index point)

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