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4. Suppose the current stock price is 1100 and the continuously compounded risk-free rate is 5%. The stock pays continuous dividends. You observe a 9-month

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4. Suppose the current stock price is 1100 and the continuously compounded risk-free rate is 5%. The stock pays continuous dividends. You observe a 9-month forward price of 129.257 i) What dividend yield is implied by this forward price? ii) Suppose you believe the dividend yield over the next 9 months will be only 0.5%. What arbitrage would you undertake? iii) Suppose you believe the dividend yield will be 3% over the next 9 months. What arti- trage would you undertake

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