Question: Consider a forward contract on a stock that matures in 6 months. The spot price of the underlying stock is $ 2 0 . There

Consider a forward contract on a stock that matures in 6 months. The spot price of the underlying stock is $20. There are dividends of $2 expected from the ownership of this stock exactly in 6 months from now.
Currently the forward price of this stock in the market is $21. The annual risk-free rate of interest is 4%.
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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