1. Suppose that you enter into a 6-month forward contract on a stock when the stock price is $20 and the risk-free interest rate (with continuous com pounding is 10% per annum. a) (6 pct) Assume the stock has no dividend for the next 6 months. What is the forward price? b) (8 pct) If you observe on the market that 6-month forward price is trading at $20 instead , how would you construct a portfolio to capture the arbitrage opportunity assume there is no dividend? c) (6 pct) If you believe that stock will have a dividend in 6 months and market price of $20 is indeed the non-arbitrage 6 month forward rate, what's the implied dividend payment? d) (5 pct) "Given forward price and stock price are the same, one should always buy forward to gain exposure to the stock as there is zero initial cost. It does not make sense to buy stock outright" would you agree with this comment and why? (again assume stock might have a dividend and $20 is the non-arbitrage 6 month forward price)