The shares of corporation are currently selling for 100. Corey notices that the price of a 1-year prepaid forward on is 98.40. The continuously compounded risk-free rate is 4%, and pays continuous dividends at the rate of 2%.

(a.) What is the correct price for a 1-year prepaid forward on ?

(b.) Please fully explain how Corey could generate a risk free profit because Corey sees an arbitrage opportunity.

(c.) Calculate Corey's risk-free profit.