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you are required to fill the orange vacant cells Instructions on how to fill them are given in red-colored texts type the steps Inputs S

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you are required to fill the orange vacant cells

Instructions on how to fill them are given in red-colored texts

type the steps

Inputs S r 100.00 dollar 0.05 Percent 2.00 year T Income amount time (tc) 5.00 dollar 1.00 year A What is the futures price F(Forward Price) Present Value of Income 105.26 dollar 4.76 Fis higher B Chose an example where F is lower Position at tq Position at T C Show how you can make an arbitrage trading strategy Position Now (t=0) Borrow Cash equal St-1 Now Borrow Buy one Unit 0.00 0 0.00 F is lower 100.00 Position at ta Pay the cash -5 Position Now (t=0) Short the underlying Lend until time T Lend until time to Buy Forward Position at T Deliver back ST Get paid 0.00 105.26 100.00 -95.24 -4.76 0.00 Get the loan 0 Pay Fto get ST -100.00 -7.105E-15 -5 5.26 Inputs S r 100.00 dollar 0.05 Percent 2.00 year T Income amount time (tc) 5.00 dollar 1.00 year A What is the futures price F(Forward Price) Present Value of Income 105.26 dollar 4.76 Fis higher B Chose an example where F is lower Position at tq Position at T C Show how you can make an arbitrage trading strategy Position Now (t=0) Borrow Cash equal St-1 Now Borrow Buy one Unit 0.00 0 0.00 F is lower 100.00 Position at ta Pay the cash -5 Position Now (t=0) Short the underlying Lend until time T Lend until time to Buy Forward Position at T Deliver back ST Get paid 0.00 105.26 100.00 -95.24 -4.76 0.00 Get the loan 0 Pay Fto get ST -100.00 -7.105E-15 -5 5.26

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