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1 8 . Suppose the spot price of a stock index is S 0 = 2 , 0 0 0 and the risk - free
Suppose the spot price of a stock index is S and the riskfree interest rate is per year. The index pays dividends at a rate of per year. The theoretical forward price for a oneyear contract is F but the market forward price is F Describe an arbitrage strategy if an opportunity exists.
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