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1. A stock is currently trading at $100. The one-year spot rate is 10%, continuously compounded, at which you can save or borrow. The stock

image text in transcribed 1. A stock is currently trading at $100. The one-year spot rate is 10%, continuously compounded, at which you can save or borrow. The stock is assumed to pay no dividend in the coming year. The forward price of a forward contract on the stock with a 1-year maturity is $110. Is there an arbitrage opportunity? If yes, can you construct a strategy to make profits both today and one year later

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