You have been provided with the information below on a Rand Merchant Investment Holdings Ltd. futures contract.

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You have been provided with the information below on a Rand Merchant Investment Holdings Ltd. futures contract. You have been provided with the current share price, risk-free rate, futures price and maturity.

Share Price = $145.99

Risk Free Rate = 7.81%

Maturity = 8 months

Futures Price = $153.84

Using futures parity, how can you take advantage (via arbitrage) of the mispricing?

Related Book For answer-question

Financial Accounting A Critical Approach

ISBN: 978-1259066528

4th edition

Authors: John Friedlan

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Posted Date: May 05, 2023 12:53 AM

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You have been provided with the information below on a Rand Merchant Investment Holdings Ltd. futures contract.

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To determine if there is an arbitrage opportunity based on futures parity we need to compare the fai... View the full answer

Financial Accounting A Critical Approach

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