Suppose he sampp 500 index is 1100 and that it is possible, Ask an Expert

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Suppose he S&P 500 index is 1100 and that it is possible to lend at 4% and borrow at 7%

a) Above what futures price is there arbitrage?

b) Below what futures price is there arbitrage?

Please also show the cash flows, which make each type of arbitrage and explain in words what you would do at each relevant date. Consider time to maturity of 6 months.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91797224

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