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a) What are the risks associated with investment in mortgage loan? (5 marks) b) Suppose that F and F are two futures prices on the

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a) What are the risks associated with investment in mortgage loan? (5 marks) b) Suppose that F and F are two futures prices on the same commodity where the times to maturity of the contracts are' and ' with: >. Prove that F, s F-6 where is the interest rate (assumed constant) and there are no storage costs. For the purposes of this problem, assume that a futures contract is the same as a forward contract

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