Concept Checks 1. Please answer the following questions: a) [5 marks] What are the main differences between forward and futures contracts? b) [5 marks] What are the three fundamental linkages between spot and derivative markets? Please explain briefly why for each linkage. c) [5 marks] Describe the clearing and settlement process in a futures transaction on a futures exchange. Specify what parties are involved and what role does each party play in the transaction? d) [5 marks] Define the following concepts: Margin Call; Variation Margin; Settlement Price; Convenience Yield; Net Interest e) (5 marks] Derive the Covered Interest Rate Parity based the "Cable" currency pair