On July 5, a stock index futures contract was at 394.85. The index was at 392.54, the

Question:

On July 5, a stock index futures contract was at 394.85. The index was at 392.54, the risk-free rate was 2.83 percent, the yield was 2.08 percent, and the contract expired on September 20. Determine whether an arbitrage opportunity was available and explain what transactions were executed?
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...