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 ii. Compute Muammar's realised profit on Day 2

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Exchange Rate Risk

It is the possibility that the value of a currency will fluctuate in the future. In the wake of globalization, business establishments have increasingly ventured into international markets. The volume of international trade has prospered excellently in the near past and is expected to be more affluent in the future. The use of exchange-traded derivative financial instruments has been multi-folded to provide for the requirements of various MNCs and offshore potential investors. Most banks and financial institutions have helped integrate the global economies. Our Government has introduced some bold and extreme measures to fulfil the purpose behind the fiscal, industrial, and monetary policies. The enactment of GST is a huge step towards streamlining the taxation system of the country. Owing to Covid-19, this aspect of corporate risk management has become critical.