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QUESTION 29 Suppose the S&P 500 index portfolio pays a dividend yield of 2% annually. The index currently is 800. The T-bill rate is 3%,

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QUESTION 29 Suppose the S&P 500 index portfolio pays a dividend yield of 2% annually. The index currently is 800. The T-bill rate is 3%, and the S&P futures price for delivery in one year is $833. Construct an arbitrage strategy to exploit the mispricing and show that your profits one year will equal the mispricing in the futures market

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