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1)[20 points] Consider a six-month forward contract on an asset. The risk- free rate of interest with continuous compounding is 5% per year. The asset

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1)[20 points] Consider a six-month forward contract on an asset. The risk- free rate of interest with continuous compounding is 5% per year. The asset price is $40 per share. The yield is 2% per year with monthly compounding. Suppose that the forward price is $35. Find an arbitrage opportunity. To receive full credit, find the net profit per share

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