1. It is 9 July 2022. Shares in Meridian Energy are trading at $4.97. You anticipate that the company will pay a 35 cent dividend on 26 August, and a 10 cent dividend on 12 March 2023. Interest rates (with continuous compounding) are 1.05%.

(a) What is a fair one year forward price for a Contact share?

(b) Suppose you are offered a one year forward price on Contact of $5. What is the arbitrage opportunity? Detail your cash flows from exploiting the arbitrage.