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A 120-day future contract on a stock that is currently trading at Sh. 30 and is expected to pay a dividend of Sh. 0.50 in

A 120-day future contract on a stock that is currently trading at Sh. 30 and is expected to pay a dividend of Sh. 0.50 in 20 days and Sh. 0.50 in 100 days. The risk free rate is 5%. Required

i. Calculate the no-arbitrage price for this contract

ii. Suppose the futures contract is currently selling at Sh. 25, demonstrate how one can exploit arbitrage opportunity if any.

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