The spot price of a stock is so = 10$; the stock pays two dividends of 1$ each at ti = 6 months and t2 = 18 months. The risk free annual rate is r = ln(1.05). (a) What is the forward price agreed upon at t = 0 for delivery of the stock at T = 2 years. (b) at t = 1 year, while the stock is worth s = 9$, the forward price for delivery of the stock at T = 2 years is quoted on market as 8.40$. is this price consistent with the No arbitrage principle ? If not, find an arbitrage strategy. The spot price of a stock is so = 10$; the stock pays two dividends of 1$ each at ti = 6 months and t2 = 18 months. The risk free annual rate is r = ln(1.05). (a) What is the forward price agreed upon at t = 0 for delivery of the stock at T = 2 years. (b) at t = 1 year, while the stock is worth s = 9$, the forward price for delivery of the stock at T = 2 years is quoted on market as 8.40$. is this price consistent with the No arbitrage principle ? If not, find an arbitrage strategy