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Question II: The S&R index spot price is 1100, the risk-free rate is 5%, and the continuous dividend yield on the index is 2%. (a)

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Question II: The S&R index spot price is 1100, the risk-free rate is 5%, and the continuous dividend yield on the index is 2%. (a) Suppose you observe a 6-month forward price of 1120. What arbitrage would you undertake? (b) Suppose you observe a 6-month forward price of 1110. What arbitrage would you undertake

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