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c) Explain what is meant by the term independent and identically distributed (i.i.d.). (5 marks) d) Consider a 6mth forward contract on a non-dividend paying

c) Explain what is meant by the term independent and identically distributed (i.i.d.). (5 marks) d) Consider a 6mth forward contract on a non-dividend paying stock with current price 28, delivery price of 32. Demonstrate that this presents an arbitrage opportunity. (The risk-free rate is 2%). (5 marks) e) Describe what is meant by the volatility term structure and explain the term moneyness

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