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1.4 Suppose that the risk-free interest rate is 10% per annum with continuous com- pounding and that the dividend yield yield on a stock is

1.4 Suppose that the risk-free interest rate is 10% per annum with continuous com- pounding and that the dividend yield yield on a stock is 4% per annum. The index is currently 401 and the futures price for a contract deliverable in four months is 405. What arbitrage opportunities does it create? Describe the trades necessary to implement? What is the profit

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