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Assume the actual forward price is $115 per share. Demonstrate how you could profit from an arbitrage trade. Size your trade to a forward
Assume the actual forward price is $115 per share. Demonstrate how you could profit from an arbitrage trade. Size your trade to a forward on one share, show all transactions you would make and give their cash flows now and at maturity. Most importantly, how much is your arbitrage profit?
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Finance Applications and Theory
Authors: Marcia Cornett, Troy Adair
3rd edition
1259252221, 007786168X, 9781259252228, 978-0077861681
