) Consider an asset priced at $50. The risk-free interest rate is 8 percent, and a futures contract on the asset expires in 45 days

I. Find the appropriate futures price if the underlying asset has no storage costs, cash flows, or convenience yield. (2 marks)

II. Find the appropriate futures price if the future value of storage costs on the underlying asset at the futures expiration equals $2.25.

III. Find the appropriate futures price if the future value of positive cash flows on the underlying asset equals $0.75.

IV. Find the appropriate futures price if the future value of the net overall cost of carry on the underlying asset equals $3.55.

V. Using Part IV. above, illustrate how an arbitrage transaction could be executed if the futures contract is trading at $60

VI. Using Part I. above, determine the value of a long futures contract an instant before marking to market if the previous settlement price was $49.