The currentspotprice of a stock is $100 per share, and therisk-freerate is 5%.The stock pays nodividends and costs nothing to store.1.Use formula 2.2 from the reading to calculate thetheoreticalarbitrage-free or fair priceof aone-year forward contract.2.An investorbuys the forward contractat the price from question 1; s/he is long thefutures contract.In a year,the spot stock price is $90 per share.What is the payoff from financially settling the long future position?$__________In a year,the spot stock price is $95 per share.What is the payoff from financially settling the long future position?$__________In a year,the spot stock price is $100 per share.What is the payoff from financially settling the long future position?$__________In a year,the spot stock price is $105 per share.What is thepayoff from financially settling the long future position?$__________In a year,the spot stock price is $110 per share.What is the payoff from financially settling the long future position?$__________3.Draw the hockey stick for this position; remember to label both axesand mark the break-even value