Consider a single-stock futures contract on Wal-Mart common stock. Assume that no dividends will be paid until after the expiration of the futures contract. Consider the following scenario:

Continuously compounded, annualized risk-free interest rate: r = 5%.

Current spot price of Wal-Mart stock: $65 per share.

Futures price on Wal-Mart single-stock futures: $65 per share.

Contract expiration: T = 0.25 year.

Does a risk-free arbitrage opportunity exist? If so, what is the basic strategy?

a.) No arbitrage opportunity exists at the moment.

b.)	Yes. Buy Wal-Mart stock, invest at the risk-free rate, and enter a long position in Wal-Mart single-stock futures.

c.)	Yes. Take a loan at the risk-free rate, buy Wal-Mart stock, and enter a short position in Wal-Mart single-stock futures.

d.)	Yes. Sell Wal-Mart stock short, invest the proceeds at the risk-free rate, and enter a long position in Wal-Mart single-stock futures.

e.)	Yes. Take a loan at the risk-free rate, sell Wal-Mart stock short, and enter a short position in Wal-Mart single-stock futures.