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3. Suppose that the price of a stock index is currently $1,100. The futures price for a contract deliverable in 6 months, with the index

3. Suppose that the price of a stock index is currently $1,100. The futures price for a contract deliverable in 6 months, with the index as the underlying asset, is $1,080. The risk-free interest rate is 10% per annum with continous compounding and the dividend yield on the stok is 4% per annum. What arbitrage opportunities does this create? Be precise regarding the arbitrage strategy.

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