spread. Assum rest cost is the only cost of hint, since you don't know the current spot price, value the 2 yr gold contract relative to the one year gold contract using the forward interest rate). Lastly show how you could replace your money market transactions with a forward T. bill. Bonus Question #1 (10 marks) a. 4 marks Calculate the profit/loss of a futures contract that is sold today for $18 and is marked to market daily at $17, $17.5, $18.5, $20, $21.5, $22. Detail the daily changes to your account. Assume no margins and ignore interest charges) b. 6 marks In a) assume the initial margin is $3, the maintenance margin is $2. Calculate the variation margins required and show that your profit/loss is the same.