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A stock currently stands at 20. The continuously compounded risk-free rate is 3% per annum. A forward contract gives an investor the right to buy

A stock currently stands at 20. The continuously compounded risk-free rate is 3% per annum. A forward contract gives an investor the right to buy 100 units of this stock in one year for a total price F.

1) What is the correct price F?

2) If F = 2100, describe in details the arbitrage possibilities.

3) Same question if F = 2000.

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