Gold price today is $1275; the futures price that expires in 9 months (September 2020) is $1280 per ounce. You believe the price of gold will go up over the next 9 months. So you will buy one futures contract that expires in September 2020. There are 100 ounces of gold in each futures contract and margin requirement for gold future is $3500 per contract.

a) Whats your futures initial position value when you buy this future contract?

b) If 6 months later, the price of gold goes up to $1290, whats the futures new position value?

c) Whats your return on investment (ROI) from the trade?

d) Whats the basis of the September 2020 futures?

e) If the risk free rate is 3%, what should be the gold futures price for September 2020 according to the Spot Future Parity?