Question
A government bond is currently priced at 98.50 and has a three-month forward price of 100.75. The risk-free rate is 5% per year. Calculate the
A government bond is currently priced at 98.50 and has a three-month forward price of 100.75. The risk-free rate is 5% per year. Calculate the profit from this arbitrage opportunity and describe the steps that you would take.
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Contemporary Financial Management
Authors: James R Mcguigan, R Charles Moyer, William J Kretlow
10th Edition
978-0324289114, 0324289111
