Return from the delta-hedged portfolio = [yAS - 0.5os -> ]dt. Return as interests from the...

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Return from the delta-hedged portfolio = [yAS - 0.5os -> ]dt. Return as interests from the bank account = r(AS-V)dt. (r-y)AS +0.5os + = rv. We have learned that the current value of a forward contract is V = S-Ke-r(T-t)), where S is the current spot price of a financial asset that pays no yield (y = 0), K is the fixed delivery price in the contract, and T is the time to maturity. We have also learned that the delta of a forward contract is A = 1. Since the delta of such forward is independent of the spot price, the gamma of the forward is F = 0. However, the forward price depends on the time to maturity, so its theta is = rKe(Tt) (some geek who knows calculus gives us this formula of theta). If a bank buys and sells the forward contract at the value V as calculated in the above formula, is there a way to trade (in any way you like) the forward, the underlying financial asset, and the risk-free bond to generate arbitrage profit? Justify your answer. Return from the delta-hedged portfolio = [yAS - 0.5os -> ]dt. Return as interests from the bank account = r(AS-V)dt. (r-y)AS +0.5os + = rv. We have learned that the current value of a forward contract is V = S-Ke-r(T-t)), where S is the current spot price of a financial asset that pays no yield (y = 0), K is the fixed delivery price in the contract, and T is the time to maturity. We have also learned that the delta of a forward contract is A = 1. Since the delta of such forward is independent of the spot price, the gamma of the forward is F = 0. However, the forward price depends on the time to maturity, so its theta is = rKe(Tt) (some geek who knows calculus gives us this formula of theta). If a bank buys and sells the forward contract at the value V as calculated in the above formula, is there a way to trade (in any way you like) the forward, the underlying financial asset, and the risk-free bond to generate arbitrage profit? Justify your answer.