Question: PROBLEM 2: Show how you would conduct protable arbitrage using the instruments and prices listed in each part below. In the Transaction column of each

PROBLEM 2: Show how you would conduct protable arbitrage using the instruments and prices listed in each part below. In the Transaction column of each table, list each instrument and show whether you are buying (long) or selling (short). Next, enter the values for the Time 0 and Time t cash ows with the correct signs. Finally, in the last row of each table, calculate the prot from the arbitrage. Cm out your calculations to 4 decimal places. Also answer the related questions below each table. Part A: An asset is currently trading at $100, the 15-month forward is currently trading at $102, and you can borrow or lend at 2% annual interest. Show how you would protably arbitrage these price relationships. Time 0 cash flows: Time t cash flows: ___ 0 At what forward price(s) will this arbitrage be u_nprotable

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