Consider a one-year forward contract on a dividend-paying stock.

Current stock price = $100

Risk-free rate of interest = 10 percent per annum.

The stock will pay a dividend of $5 per share in six months.

If the forward price is 108, is there an arbitrage opportunity?

If so, what are the correct arbitrage strategy and profit?

For the arbitrage strategy, show the cash flows from each transaction and the resulting net cash flows.