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Hi please help if you can! Suppose that the risk-free interest rate is 12% per annum with continuous compounding and that the dividend yield on
Hi please help if you can!
Suppose that the risk-free interest rate is 12% per annum with continuous compounding and that the dividend yield on a stock index is 5% per annum. The index is standing at 410, and the futures price for a contract deliverable in six months is 430.
What arbitrage opportunities does this create?
Thank you!!!
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