Hey Ian..Hope all is well I was wondering if you could help with questions below:

1) A non-dividend paying stock is currently traded at $65 per share. What should be an equilibrium forward price on the stock for delivery in 9 months? The risk-free interest rate (with continuous compounding) is 6% per annum.

2)In August, you took a long position on a 6-month forward contract on a non-dividend-paying stock when the stock price was $45 and the risk-free interest rate (with discrete compounding) is 4% per annum. It is now September,exacly one month later. The current stock price is $50 and the interest rate is6%. Estimate the value of your position now. Assume the forward contracts arepriced such that no arbitrage profit making opportunities exist.

3)

Q3 (Arbitrage) On May 9, 2012 , Apple Inc. (AAPL) stock was traded at $568.50 ( spot price).The mean target price by analysts was $707.09. On May 9th, 2012, a forwarddealer was willing to sell AAPL stocks on a forward contract maturing in 3 months (8/9/2012) at $640.25 (3-mo forward price) and buy at 632.25. You can borrow or lend money with a 3-monthmaturity at 4% /year.

a) The market is not in equilibrium. Explain/Prove why the market is not in equilibrium.

b) Design an arbitrage profit taking strategy and show the amount of the profit your strategy will produce.