a) The current price of Google is $1,300. The yield curve is flat at 5% annual interest rate, compounded every 6 months. Google will pay a dividend of $13, six months later. Consider a 6-month futures contract on Google stock, which expires right after the dividend is paid. What is the fair price of this contract?

b) You observe that the current price of the market futures that expires in 6 months is $1,350. How would you take advantage of this mispricing?