QNo 1. Consider a 4-month forward contract to buy a non-dividend paying share.The current price of the share is Rs. 930andthe 4-month risk-free rate of interest (continuously compounded) is 6% per annum,i)Describe an arbitrage strategy to earn arbitrage profit if the forward price is out of equilibrium and is at Rs 952.ii)Calculate,what will be the total arbitrage profit resulting from this strategy?

i)Describe an arbitrage strategy to earn arbitrage profit if the forward price is out of equilibrium and is at Rs 952.

ii)Calculate,what will be the total arbitrage profit resulting from this strategy?