The 10 year CD promises to repay the initial invested amount plus 70% of the gain in the S&P 500 index. Assume $1000,000 is invested when S&P 500 is 1300. What is the final payoff assuming S&P 500 grows on average 8.5% per year? Plot the payoff vs. S&P 500 index value. Is the portfolio equivalent to a ZC plus a call option? If so, what is the price of the ZC plus the number of shares of the call option contracts. Could you create a revised version of the portfolio such that the pay off would be at least 20% higher.