Question: URGENT !!!!!!!!! PLEASE ANSWER ASAP !!!!!!!!! ANSWERS MUST BE TYPED !!!!!!!!! THANK YOUUUU !!! Ali is holding 20,000 kilograms stocks of palm oil. Suppose the

 URGENT !!!!!!!!! PLEASE ANSWER ASAP !!!!!!!!! ANSWERS MUST BE TYPED !!!!!!!!!

URGENT !!!!!!!!! PLEASE ANSWER ASAP !!!!!!!!! ANSWERS MUST BE TYPED !!!!!!!!! THANK YOUUUU !!!

Ali is holding 20,000 kilograms stocks of palm oil. Suppose the price of 1,000 kilograms of palm oil in the cash market is RM2,500. He wants to hedge against the decline in palm oil prices so that it does not have a severe effect on the value of his investment. a) Discuss the actions that Ali should do to achieve this purpose. (4 Marks) b) Compute the value of his portfolio when the spot price: i) drops to RM1,400 (4 Marks) ii) increases to RM1,900 (4 Marks)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!