3. Suppose the S&R index is 800, and that the dividend yield is 0. You are an arbitrageur with a continuously compounded borrowing rate of 5.5% and a continuously compounded lending rate of 5%. Assume that there is 1 year to maturity. Also assume that the contracts are for one unit of the S&R index and that the contracts are cash settled.) a. Supposing that there are no transaction fees, show that a cash-and-carry arbitrage is not profitable if the forward price is less than 845.23, and that a reverse cash-and-carry arbitrage is not profitable if the forward price is greater than 841.02. b. Now suppose that there is a $1 transaction fee, paid at time o, for going either long or short the forward contract. Showthat the upper and lower no-arbitrage bounds now become 846.29 and 839.97. c. Now suppose that in addition to the fee for the forward contract, there is also a $2.40 fee for buying or selling the index. Suppose the contract is settled by delivery of the index, so that this fee is paid only at time o. What are the new upper and lower no-arbitrage bounds