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Please give your answers on all the following questions: Q1) an index is 1,200. The three-month risk-free rate is 4% per annum and the dividend yield over the next three months is 1.2% per annum. The six-month risk-free rate is 4.5% per annum and the dividend yield over the next six months is 1% per annum. Estimate the futures price of the index for three-month and six-month contracts. All interest rates and dividend yields are continuously compounded. Q2) the 2-month interest rates in Switzerland and the United States are, respectively, 2\% and 3\% per annum with continuous compounding. The spot price of the Swiss franc is $1.0500. The futures price for a contract deliverable in 2 months is also $1.0500. What arbitrage opportunities does this create? Q3) the spot price of oil is $90 per barrel and the cost of storing a barrel of oil for one year is $4, payable at the end of the year. The risk-free interest rate is 5% per annum continuously compounded. What is an upper bound for the one-year futures price of oil? Q4) A stock is expected to pay a dividend of $1 per share in 2 months and in 5 months. The stock price is $40, and the risk-free rate of interest is 7% per annum with continuous compounding for all maturities. An investor has just taken a short position in a 6 -month forward contract on the stock. (a) What are the forward price and the initial value of the forward contract? (b) Three months later, the price of the stock is $38 and the risk-free rate of interest is still 7% per annum. What are the forward price and the value of the short position in the forward contract? Q5) Suppose that the risk-free interest rate is 9% per annum with continuous compounding and that the dividend yield on a stock index is 3% per annum. The index is standing at 400 , and the futures price for a contract deliverable in four months is 405 . What arbitrage opportunities does this create? Q6) A US Treasury bond pays a 8\% coupon on January 7 and July 7. How much interest accrues per $100 of principal to the bondholder between July 7,2014, and August 8,2014 ? How would your answer be different if it were a corporate bond? Please give your answers on all the following questions: Q1) an index is 1,200. The three-month risk-free rate is 4% per annum and the dividend yield over the next three months is 1.2% per annum. The six-month risk-free rate is 4.5% per annum and the dividend yield over the next six months is 1% per annum. Estimate the futures price of the index for three-month and six-month contracts. All interest rates and dividend yields are continuously compounded. Q2) the 2-month interest rates in Switzerland and the United States are, respectively, 2\% and 3\% per annum with continuous compounding. The spot price of the Swiss franc is $1.0500. The futures price for a contract deliverable in 2 months is also $1.0500. What arbitrage opportunities does this create? Q3) the spot price of oil is $90 per barrel and the cost of storing a barrel of oil for one year is $4, payable at the end of the year. The risk-free interest rate is 5% per annum continuously compounded. What is an upper bound for the one-year futures price of oil? Q4) A stock is expected to pay a dividend of $1 per share in 2 months and in 5 months. The stock price is $40, and the risk-free rate of interest is 7% per annum with continuous compounding for all maturities. An investor has just taken a short position in a 6 -month forward contract on the stock. (a) What are the forward price and the initial value of the forward contract? (b) Three months later, the price of the stock is $38 and the risk-free rate of interest is still 7% per annum. What are the forward price and the value of the short position in the forward contract? Q5) Suppose that the risk-free interest rate is 9% per annum with continuous compounding and that the dividend yield on a stock index is 3% per annum. The index is standing at 400 , and the futures price for a contract deliverable in four months is 405 . What arbitrage opportunities does this create? Q6) A US Treasury bond pays a 8\% coupon on January 7 and July 7. How much interest accrues per $100 of principal to the bondholder between July 7,2014, and August 8,2014 ? How would your answer be different if it were a corporate bond