Consider a forward contract on a stock that matures in 6 months. The spot price of the
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Question:
Consider a forward contract on a stock that matures in months. The spot price of the underlying stock is $ There are dividends of $ expected from the ownership of this stock exactly in months from now.
Currently the forward price of this stock in the market is $ The annual riskfree rate of interest is
a Identify, whether there are any arbitrage opportunities available in these conditions.
b Identify a strategy that allows to earn riskless profits in the conditions described and calculate the riskless profits.
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