3. (a)Suppose A(t) represents the price of a zero-coupon one-year bond where A(0) = 24, A(1) = 30, and S(0) = 20; the future stock price is unknown.2 Your portfolio consists of stocks, bonds, and forward contracts on the stock. Determine the forward price F for the stock to avoid an arbitrage opportunity.

(b) Suppose the price of the forward contract F(0,T) = 23. Construct a portfolio that exploits the arbitrage opportunity that arises. Make sure to state how much money you will make.