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2. Consider a 4-monthy forward contract to buy a zero-coupon bond that will mature l year from today. The current price of the bond is

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2. Consider a 4-monthy forward contract to buy a zero-coupon bond that will mature l year from today. The current price of the bond is $930. We assume that the 4-month Fiskfree rate of interest (continuously compounded) is 6% per annum. Assume short selling is not allowed. a) Calculate the forward price of the bond (2 Marks) b) Are there any arbitrage opportunities if the forward price is $930 ? If there are any arbitrage opportunities, calculate the arbitrage profit

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