What is the 1year futures value for a stock with spot price of $200. Assume the one-year T-bill rate is 3% and dividend yield is 2%. All the rates are continuously compounded. If possible, conduct an arbitrage strategy that assumes the actual futures price in the market is $210? What is the arbitrage strategy and the profit from the arbitrage

Answer rating: 100% (QA)

Heres the analysis for the stock and potential arbitrage strategy 1 Fair Futures Price We need to fi... View the full answer