Consider a XYZ stock index spot price is 69 and 7-months forward price is 70. The...
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Consider a XYZ stock index spot price is 69 and 7-months forward price is 70. The continuously compounded dividend yield and risk-free interest rate are 3% and 5% respectively. Market maker could take arbitrage opportunity by (long/short) forward contract and (long/short) synthetic forward contract which includes (buying/selling) stock and (borrowing / lending) money. So the profit at expiration time will be (Please round your answer to 4 decimal places) Consider a XYZ stock index spot price is 69 and 7-months forward price is 70. The continuously compounded dividend yield and risk-free interest rate are 3% and 5% respectively. Market maker could take arbitrage opportunity by (long/short) forward contract and (long/short) synthetic forward contract which includes (buying/selling) stock and (borrowing / lending) money. So the profit at expiration time will be (Please round your answer to 4 decimal places)
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