An investor purchased a newly issued bond with a maturity of $10$ years $200$ days ago. The bond carries a coupon rate of

$8\%$ paid semiannually and has a face value of R$1000.$ The price of the bond with accrued interest is currently R$1146\mathrm{.}92.$

The investor plans to sell the bond $365$ days from now. The schedule of coupon payments over the first two years, from

the date of purchase, is as follows:

Coupon Days after Purchase Amount

First $181$ R$40$

Second $365$ R$40$

Third $547$ R$40$

Fourth $730$ R$40$

$1$

$2\mathrm{.}1$ Should the investor enter into a long or short forward contract to hedge their risk exposure? $[1]$

$2\mathrm{.}2$ Assume that the risk$-$free rate is $6\%$ per annum. Determine the no$-$arbitrage price at which the investor should

enter the forward contract.