Question 2 (10 points) A non-dividend-paying stock is currently priced at 101, the continuously compounded annual interest rate is 0.05. A forward delivering one share of the stock after 1 year has a strike 106. What arbitrage opportunity would you undertake ? (Hint : if the forward is over-priced compared to its theoretical price, then take a short position on the forward. Otherwise, if the forward is under-priced, take a long position on the forward. )