Question 7 (4 points) Continued from the question above, if the 3-month forward price is $46. what is the annualized continuous dividend yield? 3.17% 2.41% 7.80% 0.21% 1.26% Question 8 (4 points) The S&R index spot price is 1100, the continuously compounded annual risk-free rate is 6%, and the contiunuousdividend yield on the index is 2%. Suppose you observe 6-month forward price of 1200. What arbitrage would you undertake and what is the resulting arbitrage profit? (Hint: Compare the no arbitrage forward price and the market forward price given to make your conclusion. Alternatively, you can use the payoffs to a "cash-and-carry" and a "reverse cash-and-carry" to make your conclusion.) You will engage in a reverse cash-and-carry arbitrage, and the resulting arbitrage profit is $100. You will engage in a cash-and-carry arbitrage, and the resulting arbitrage profit is $77.78. There is no arbitrage opportunity existed. You will engage in a reverse cash-and-carry arbitrage, and the resulting arbitrage profit is $77.78. You will engage in a cash-and-carry arbitrage, and the resulting arbitrage profit is $100