On February 1 you buy a T-Bond futures put option. You pay a premium of 2000 The exercise price, E, is 115 points. Here we use the convention of the Chicago Board of Trade of quoting in points, with 1 point = USD 1000. At expiration date T of the option the market price of the underlying is (a) ST = 115, (b) ST 110, (c) ST = 120 Your task is to (i) Draw an accurate profit diagram using the assumptions of (a), (b), (c), with "Profit" on the vertical axis and "Market Spot Price ST" on the horizontal axis. Explain in detail the reasoning behind the points that you draw in the diagram, i.e. the "how" and "why" of the calculation of profit, and the shape of the graph you get by connecting the points. (ii) What is a "Put Option Defined on Treasury Bond Futures"? Explain what exactly we are dealing with here. Who is given the right to do what according to this contract?