Suppose you take a "short" $($selling$)$ position in May Cotton futures at $$\frac{0\mathrm{.}86}{?}$ pound on

Monday. The contract size is $50,000$ pounds.

a$.$ On Tuesday the price falls to $$\frac{0\mathrm{.}82}{?}$ pound. Do you pay variation margin to the clearing

house or receive variation margin from the clearing house, and how much money?

b$.$ On Wednesday the price rises to $$\frac{0\mathrm{.}88}{?}$ pound. Do you pay variation margin to the

clearing house or receive variation margin from the clearing house, and how much money?

c$.$ That goes on day by day until May. If the price of May Cotton Futures on May $10$ is

$$\frac{0\mathrm{.}90}{?}$ pound, what is your variation margin position $($that is$,$ have you up to that time

overall paid money to the clearing house and received money, and how much$)$

d$.$ On May $10$ if a delivery takes place will you be receiving delivery or making delivery?

e$.$ At what price will you make or take delivery? How much money will you pay or receive?

And, considering both the delivery amount and your variation margin position, what is the

effective price for the cotton?

Today's price for gold is $$2,020\mathrm{.}00/$troy ounce. The annualized interest rate for the next

$3$ months is $5\mathrm{.}30\%(0\mathrm{.}0053).$ What do you expect the $3-$month futures$/$forward $($i$.$e$.$ April

futures$)$ gold price to be$?$

The gold futures contract has a notional quantity of $100$ troy ounces. At your futures

price, what is the notional value of an April futures contract?