Describe actions you could take at time 0 to exploit an arbitrage opportunity (if any). Calculate the resulting profit (per stock unit).If you given the following:

1.The current bid price and ask price of a stock are 30 and 31, respectively.

2.The stock pays dividends continuously at a rate proportional to its price. The dividend yield is 3%

3.The continuously compounded lending and borrowing rates are 6% and 7%, respectively.

4.The transaction costs are:

A $1 transaction fee, paid at time 0, for buying or selling each unit of the stock.

A $2 transaction fee, paid at expiration, for settling a forward contract on the stock

5.The 3-year forward price on the stock is 28.