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Question 7 (10 points) A trader found that the stock index is standing at 2000, and the futures price for a contract deliverable in six

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Question 7 (10 points) A trader found that the stock index is standing at 2000, and the futures price for a contract deliverable in six months is 2035. Market risk-free interest rate is 7% per annum with continuous compounding and that the dividend yield on a stock index is 3% per annum with continuous compounding. Is there any arbitrage opportunities for the trader? What is arbitrage strategy the trader could adopt? + e e

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