1 Suppose the value of the S&P 500 stock index is currently 800. If the 1-year T-bill rate is 5% and the expected dividend yield on the S&P 500 is 4%, what should the 1-year maturity futures price be? What if the T-bill rate is less than the dividend yield, for example, 1%?

2 It is now January. The current interest rate is 2%. The June futures price for gold is $1,500, whereas the December futures price is $1,510. Is there an arbitrage opportunity here? If so, how would you exploit it?