Consider a 7-month forward contract on Apple Computer Inc. (AAPL). The current price of one share is $208, and the annual continuously compounded risk-free interest rate is 5%. Suppose the actual quoted forward price for a 7-month contract is 215.15 per share of AAPL. Assume that the arbitrageur decides to set up an arbitrage trading strategy, starting with trading forward contract on 1 share of stock. In this arbitrage trading strategy, the arbitrageur needs to borrow or lend. What is the future value of the loan at t=7 month? Assume that the borrowing rate is 7% per year with semiannual compounding and lending rate is 4.8% per year with monthly compounding. Please do NOT present the sign; only show the cash amount. Please input 0 if there's no cash flows related to the transaction. Please round the number solution to 2 decimal places, such as 31.23 Your answer: $ Consider a 7-month forward contract on Apple Computer Inc. (AAPL). The current price of one share is $208, and the annual continuously compounded risk-free interest rate is 5%. Suppose 1) that the actual quoted forward price for a 7- month contract is 215.15 per share of AAPL; 2) that the borrowing rate is 7% per year with semiannual compounding and lending rate is 4.8% per year with monthly compounding; and 3) the arbitrageur insists shorting a forward contract on 1 share of stock and using proper arbitrage" asset trading and loan transactions as we discussed in lecture. What is the net payoffs of the trader's overall arbitrage trading strategy at t=7 month? Your answer is $ Please round the number solution to 2 decimal places. Please use negative sign to indicate loss. For example, if it's a gain, please express as 5.86; if it's a loss, please express as -5.86. Consider a 7-month forward contract on Apple Computer Inc. (AAPL). The current price of one share is $208, and the annual continuously compounded risk-free interest rate is 5%. Suppose 1) that the actual quoted forward price for a 7- month contract is 215.15 per share of AAPL; and 2) that the borrowing rate is 7% per year with semiannual compounding and lending rate is 4.8% per year with monthly compounding. What would an arbitrageur do? Buy the forward contract Do nothing since there is no feasible arbitrage opportunity. Sell the forward contract