a$)$ If the dividend yield is $1\mathrm{.}40\%$ annualized, the interest rate is $0\mathrm{.}10\%$ annualized, and the index is trading at $28,144$ today, what is the expected price of a $6-$month forward?

$28,144$e$(-0\mathrm{.}001-0\mathrm{.}0140)*0\mathrm{.}50=27,961\mathrm{.}66$

b$)$ The $6-$month forward is currently quoted at $28,000.$ Using the information above and the grid below, show how you would arbitrage this index profitably. Be sure to indicate whether each transaction is long or short $($buy or sell$)$ and to include $(+)$ and $()$ signs on your cash flows. Use $0$ decimals $($whole numbers only$)$ in your answers.

Transaction Time $0$ cash flows Time t cash flows

Totals: