The S&P portfolio pays a dividend yield of 1% annually. Its current value is 1,500. The T-bill

Question:

The S&P pays a yield of 1% annually. Its current value is 1,500. The T-bill rate is 4%. Suppose the S&P futures price for delivery in 1 year is 1,550. Construct an arbitrage strategy to exploit the mispricing and show that your profits 1 year hence will equal the mispricing in the futures market.
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their... Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...