Q$2.$ Standard Chartered is reportedly weighing a restructuring of its investment banking arm in a bid to

cut costs and boost returns. The emerging markets$-$focused lender is considering is a break$-$up of the

bank's investment and corporate banking businesses, Bloomberg News reported on ${14}^{th}$ February $2024,$

with the firm yet to land on a final decision. If Standard Chartered Bank is trading at $$50$ now and

provides $4\%$ dividend yield. The risk$-$free rate is $6\%.$ Both rates are continuously compounding.

a$.$ What is the price of a forward contract that expires $1$ year from today?

$(1$ points$)$

b$.$ Suppose you observe a one$-$year forward price of $$52.$ What action would you take and what is the

arbitrage would you get?

$(3$ points$)$

c$.$ Suppose you observe a one$-$year forward price of $$50.$ What action would you take and what is the

arbitrage would you get?

$(3$ points$)$