Question: 3. (i) Discuss the key differences between forward and futures contracts. (30 marks) (ii) Construct a numerical example of marking to market and discuss the

3. (i) Discuss the key differences between forward and futures contracts.

3. (i) Discuss the key differences between forward and futures contracts. (30 marks) (ii) Construct a numerical example of marking to market and discuss the relative risk exposure of corresponding futures and forward positions. (70 marks)

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