c. The company needs to buy significant quantities of electricity for its operations. This is a major component of the costs that they face, and they would like to hedge their exposure. They are given two options: a futures contract which would allow them to lock in a price today of $55 / KWH of electricity, for deliver in 1 years time, and a 1 year option with a cost of $6 per KwH hedged, and an exercise of $48 per KwH. i) Draw a profit/loss diagram, with Electricity Price at expiry on the horizontal axis, and profit/loss per litre on the vertical axis (1.5 marks) ii) At what final electricity price does the company prefer options? At what final prices do they prefer futures? At what final price are they indifferent? (2.5 marks)