Question: A particular stock does not pay dividends and is currently priced at $12. Suppose that the quoted futures price for delivery in 1 year is

A particular stock does not pay dividends and is currently priced at $12. Suppose that the quoted futures price for delivery in 1 year is $12.45. The continuously compounded interest rate is 2%. The underlying does not pay dividends and there are no costs of trading. How could you make a riskless arbitrage profit?

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