Muammar deposited RM18,000 as margin to buy four FCPO contracts at a price of RM2,200 per metric ton. At the end of the day, the FCPO price settle at RM2,300. Muammar decides to hold the position until Day 2. On Day 2, the FCPO price went up to RM2,470 and Muammar decided to realise his profit by closing his position.

i. Calculate the cash position of Day 1 (3 marks)

ii. Compute Muammar’s realised profit on Day 2 (3 marks)

Answer rating: 100% (QA)

A securities with a price that is based on or derived from one or more underlying assets is referred to as a derivative A contract between two or more ... View the full answer