1. A non-dividend paying stock currently sells for 100 . One year from now the stock sells for 110 . The annual risk-free rate, compounded continuously, is 6%. A trader purchases the stock in the following manner: The trader pays 100 today. The trader takes possession of the stock in one year. Determine which of the following describes this arrangement. A. Outright purchase B. Fully leveraged purchase C. Prepaid forward contract D. Forward contract E. This arrangement is not possible due to arbitrage opportunities 9. Determine which of the following is NOT a distinguishing characteristic of futures contracts, relative to forward contracts. A. Contracts are settled daily, and marked-to-market. B. Contracts are more liquid, as one can offset an obligation by taking the opposite position. C. Contracts are more customized to suit the buyer's needs. D. Contracts are structured to minimize the effects of credit risk. E. Contracts have price limits, beyond which trading may be temporarily halted