Horelyz & Sheyla Corporation expects interest rates to increase and purchase a put option on Treasury bond (T-bond) futures. Assume the exercise price on T-bond futures is $97,000, and the premium paid for the put option is $3,000. Assume that interest rates do increase, and as a result, the price of the T-bond futures contract declines over time and is valued at $89,000 shortly before the options expiration date. At this time, the corporation decides to exercise the option and closes out the position. Requirements 1. Is there any economic (intrinsic) value in the option? Show the formula, do the math step by step until the final result, and indicate the unit of measurement in dollar amount. 2. Is the option in the money, at the money, or out of the money? Explain. 3. Calculate the net profit expressed in dollar amount. Show the formula, do the math step by step until the final result, and indicate the unit of measurement in dollar amount. 4. Will you exercise the option? Explain. 5. Calculate the overall financial return, expressed in percentage terms, on the total capital invested. Show the formula, do the math step by step until the final result, and indicate the unit of measurement. 6. Calculate the overall financial return (percentage terms) on the option premium. Show the formula, do the math step by step until the final result, and indicate the unit of measurement in percent terms. 7. In case you do not exercise the option, what would the net profit be