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Let S(t) denote the spot price of an asset at time t. Let r denote...

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Let S(t) denote the spot price of an asset at time t. Let r denote the risk-free rate of return. Let F(t) denote the futures price at time t for a futures contract with delivery date T. (a) (4 points) If we are at time t = 0, one unit of the asset costs $100, the risk-free rate is 4% per year (continuously compounded) for the year period, and the we plan to hedge a long position in the asset worth $100,000 for 1 year, what is the value of the basis at this time

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