a$.$ The price of shares in The Coca Cola Company $($KO$)$ is $$\frac{60\mathrm{.}00}{?}$ share. Its dividend will

be paid on March $19(57$ days from today$),$ and is expected to be $$\frac{0\mathrm{.}46}{?}$ share.

If the relevant annualized interest rate until March $19$ is $5\mathrm{.}30\%,$ what do you expect

today's futures price to be$?($Don$\text{'}$t forget the dividend payment!$)$

b$.$ Now suppose you see that the actual futures price is $$\frac{2}{?}$ share lower than the price you

calculated. Describe how you can make a profit by arbitraging the difference between

the actual futures price and the price you calculated, with no market risk. $($Remember

that you can short$-$sell these shares; use $5\mathrm{.}30\%$ as the relevant rate for this, also.$)$

c$.$ Now suppose you see that the actual futures price is $$\frac{2}{?}$ share higher than the price

you calculated. Describe how you can make a profit by arbitraging the difference

between the actual futures price and the price you calculated, with no market risk.

$($Remember that you can buy these shares on margin; use $5\mathrm{.}30\%$ as the relevant rate

for this, also.$)$

The S&P $500$ Index is currently $4850\mathrm{.}00.$ Its annual dividend rate is $1\mathrm{.}60\%.$ The

financing interest rate is $5\mathrm{.}0\%$ per year. Calculate the $3-$month forward price of the E$-$mini S&P

$500$ Futures Contract.