Mr$.$ Ranganathan, a US based investor, owns a security that is currently worth $$990,$ which he believes is a very good price to sell the security. However, due to tax constraints he cannot sell the security now but he plans to sell it in three month's time. To hedge against a possible decline in price during the next three months, he decides to enter into a forward contract with three months to expiration. The risk free rate is $5\mathrm{.}2\%.$

a$)$ Should Mr$.$ Ranganathan enter into a long or short forward contract to hedge his risk exposure? Why? Explain succinctly in a few sentences.

b$)$ Calculate the fair forward price for this contract.

c$)$ Suppose the dealer offers to enter into a forward contract at $$998.$ Explain how Mr$.$ Ranganathan can earn an arbitrage profit.

d$)$ Compare and contrast Forwards with Swaps? Explain succinctly in a few sentences.