The GSCI Commodity Index is computed from returns of holding a diversified index of commodities.

a. Compute the 3-month forward price according to the cost of carry model for this index if the spot price is $1,000 and the continuously compounded annual rates for the various costs and benefits are 5% for interest rates, 4% for the dividend yield, 2% for storage costs, and 4% for convenience yield.

b. If you observe a forward price of 986.75 in the market, show all the trades that would enable you to profit from this situation.