Suppose the current price for an equity index is 6,350, the 6-month dividend yield on the index is 1.20% per annum continuously compounded, and the 6-month interest rate is 2.40% per annum continuously compounded.

(a) Calculate the no-arbitrage 6-month forward price for the equity index. (3 marks)

(b) Suppose you sell 100 of the 6-month forward contract on the equity index at the no-arbitrage forward price. What movements in market prices/rates would cause the value of your forward position to decrease? (2 marks)