Exercise 3.5 (Final Exam Problem, Winter Quarter 20222 ) Suppose you are a website designer who prefers to be paid in the cryptocurrency Bitcoin rather than in USD. On March 15, 2022, you make a deal with a client to create them their website with deadline end of July 2022. Your client agrees to pay you 0.30 Bitcoin for your work, but the client insists to pay you 0.30 Bitcoin end of July at the deadline, and not earlier. Knowing that Bitcoin is very volatile, the arrangement of being paid 0.30 Bitcoin only in July but not on March 15 (in advance) makes you feel a bit worried. However, Micro Bitcoin Futures (MBT) are traded on the exchange CME. The contract size is 0.10 units of Bitcoin per contract, the initial margin is 50% of the size (in USD) of the total position taken in the futures contracts and the maintenance margin is $1,255 per contract. The futures contracts are settled in cash (in USD) on the last day of trading of the delivery month and do not involve any "physical" (digital) transfer of Bitcoin. On March 15, the spot price of Bitcoin quoted on the cryptocurrency exchange Binance is $38,400 per one unit of Bitcoin and July 2022 Micro Bitcoin Futures are traded for $38,800 per one unit of Bitcoin on CME. On this day, you decide to use July 2022 Micro Bitcoin Futures for hedging your entire exposure to price changes of Bitcoin. (a) Describe the position you have to take with the July Bitcoin futures contracts from CME in order to hedge yourself. What is the initial margin you have to provide? Friday July 29, 2022, is the last day of trading July Bitcoin Futures on CME and at the end of that day your position in the futures contracts is settled in cash in USD at $23,000 per Bitcoin, the final settlement price determined by CME (the CME Bitcoin Reference Rate on this day). Moreover, you also finish your work on this dey and you receive 0.30 Bitcoin from your client. (b) On Friday July 29, 2022, the Bitcoin spot price quoted on Binance is $23,900 per Bitcoin. If you decide to sell your 0.3 Bitcoin you receive from your client on Binance for this spot price, what is the total USD amount you receive for your Bitcoins, together with taking into account your hedge from the futures contracts