1) Assume that one share of the S&P 500 Index can be purchased for $4,100.00 and that the dividend yield is 2.25% over the holding period and the risk-free rate is 3.00% over the holding period. What should the contract price on a one-year S&P 500 futures be? 2) Imagine you want to put on a short hedge by purchasing the S&P 500 at 4100 and shorting the futures at 4175. If at the expiration date, the futures contract is valued at 4250, what is the: a. Net Futures Profit b. Net Index Profit C. Dividend d. Net Profit e. If there is no arbitrage opportunity, what must the risk-free rate be? 3) Imagine that you can borrow or lend at a risk-free rate of 3.00% in the US, and you can borrow. or lend at a risk-free rate of 4.25% in Europe. You have $1 million to invest for one-year. The exchange rate is: 1.0000 USD = 0.9562 EUR. a. Is there a covered interest arbitrage opportunity? b. If so, how much (in USD) can you profit? c. Explain what you would do to exploit a mispricing. d. What would the one-year futures contract FX rate have to be (approximate out to 4 decimals) to eliminate the arbitrage opportunity