Question: May I ask how to do this question Suppose the current stock price of the Walt Disney Company is $50 and you can enter a

May I ask how to do this question

Suppose the current stock price of the Walt Disney Company is $50 and you can enter a forward contract (long or short position) to buy 50'000 stocks in 9 months for $51 each. The Walt Disney stock is expected to increase to $53 in 9 months. The 9-month (risk free) spot rate is 3% (c.c.). (a) Is there an arbitrage if Walt Disney does not pay dividends? If so, carefully describe a possible arbitrage strategy. What should the forward price be in a world without arbitrage? (b) Suppose the 3-month (risk free) spot rate is 2.75%. Is there an arbitrage if Walt Disney pays a dividend of $0.75 in 3 months? If so, carefully describe a possible arbitrage strategy. What should the forward price be in a world without arbitrage

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