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ABC Corp. s stock price is $ 5 0 today. It pays dividends of $ 1 after two months and $ 1 . 0 5

ABC Corp.

s stock price is $

50

today. It pays dividends of $

1

after two months and $

1.05

after five months. The continuously compounded interest rate is

4 %

.

.

If the six

-

month forward price is $

51,

demonstrate how to make arbitrage profits or explain why you cannot.

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