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Arbitrage opportunity Suppose that: The spot price of nondividend-paying stock is $50 The 3-month forward price is US$50 The 1-year USS interest rate is 10%

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Arbitrage opportunity

Suppose that: The spot price of nondividend-paying stock is $50 The 3-month forward price is US\$50 The 1-year USS interest rate is 10% per annum (continuously compounded) Calculate the potential profit from any arbitrage opportunity that may exist

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