A share of stock A is trading at $250. Stock A is expected to pay a dividend of $3 per share at year-end. The risk-free rate in the economy is 6%. a. What should be the 1-year futures price on stock A ? b. Assume the one-year futures price is \$263.5. Does this constitute an arbitrage opportunity? How would an arbitrageur exploit it? Assume the dividend is paid out immediately preceding delivery on the futures. (Recall the example we went through in class - how would you add in the dividend?) c. Suppose the one-year futures price were $260.5 - would this constitute an arbitrage opportunity? How would an arbitrageur exploit it? (Note: If a stock that is sold short pays out a dividend, the short seller must pay the original owner of the stock the amount of the dividend.)