derivatives

1.Suppose the current stock price is $40 and the forward price is 40.5. The forward matured in 3 months. The continuous risk-free interest rate is 6% p.a..What is the annualized forward premium?What is the annualized continuous dividend yield?

2.The S&R index level is 900 at t=0. The dividend yield is 3% p.a. continuously compounded and the risk-free rate is 5% continuously compounded.What is the theoretical forward price with a maturity of 1 year?

3.Suppose you observe a forward price with a maturity of 1 year equal to 950. What position do you take in order to earn arbitrage profit?

a. Long stock and short forward

b.Long stock and long forward

c.Short stock and long forward

d.Short stock and short forward

4.Suppose you observe a forward price with a maturity of 1 year equal to 950. What is your arbitrage profit at t=1?