Contract that pays 2000ln(S(t)) at time t = 0:50 and stock price is S(0) is 175: Use tangent of log contract created where point S(0) is above the log contract. Find an upper bound for price of contract paying 200 ln(S(t)). The continuously compounded interest rate for the six month maturity is currently 6.7%, so find the arbitrage strategy to be used if the upper bound was violated.