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Suppose that the futures price is below the no-arbitrage price that you calculated. What strategy can you use to realize an arbitrage profit? Find an
Suppose that the futures price is below the no-arbitrage price that you calculated. What strategy can you use to realize an arbitrage profit? Find an expression for the arbitrage profits from implementing this strategy as a function of the observed futures price. Demonstrate your arbitrage strategy and corresponding profits using a payoff table
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