2. In July 2004, six-month futures on the FTSE 500 stock index traded at 16,000. The spot was 13,300. The interest rate was 19% p.a. and the dividend yield was 4% (for six months). Assume that the entire dividend is paid on contract maturity, and the contract concerns the ex-dividend price. Are the futures are fairly priced? If not, illustrate an arbitrage strategy to take advan- tage of this opportunity.