The price of a stock is $75 today, and the continuously compounded interest rate is 8 % per annum. If the 9-month forward price of this asset is $78.33, there are arbitrage opportunities. To realize an arbitrage profit today, _______ the forward contract, _______one share of the stock, and make a borrowing or invest (whichever is appropriate) of _______, and make an arbitrage profit of ________ today.

Select one:

a. buy, buy, $75.8344, $1.3077
b. buy, short sell, $73.768, $1.2315
c. sell, short sell, $75.8344, $1.3077
d. sell, buy, $73.768, $1.2315
e. sell, buy, $75.8344, $1.3077

Answer rating: 100% (QA)

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