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The spot price on the S&P 500 is $20,000 and the 1-year futures price is $20,609.09. The 1-year risk-free rate is 3% per annum with

The spot price on the S&P 500 is $20,000 and the 1-year futures price is $20,609.09. The 1-year risk-free rate is 3% per annum with continuous compounding. Note an S&P 500 futures contract is for 250 times the S&P 500.

a. Calculate what the payoff and profit for the long future if the S&P 500 price is _____. i. $19,500 ii. $20,000 iii. $21,100

b. Draw the profit and payoff function for the long future. Label the points calculated in part a. (Provide labels for the axes)

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