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Consider a forward contract which allows you to buy/sell a non-dividend paying stock in three months. Assume the current stock price is $40 and the

Consider a forward contract which allows you to buy/sell a non-dividend paying stock in three months. Assume the current stock price is $40 and the three-month risk free interest is 5% per year. What should be the forward price? No need to answer: If the forward price is $43 (0r $39), what arbitrage positions should you take?

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