The current stock price is $200 and the risk-free rate is 5% per annum. The stock is expected to pay a dividend of $5 at the end of the year. The actual futures price (for delivery in one year) is $208.

a) Use the spot-futures parity to suggest an arbitrage strategy to earn risk-free profits. Specifically, describe the various short and long positions you need to take and show all the relevant cash flows from this strategy at both origination and expiration (in one year). Use a table to show all of your work. [Note: Long = Buy; Short = Sell]