Suppose that there are no dividends paid by google and the, Ask an Expert

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Suppose that there are no dividends paid by Google and the interest rate for borrowing or lending is 5% per annum.

How could you make money if the June and December futures contracts for a particular year trade at $530 and $550, respectively?

If it were possible to trade the December forward contracts at the same price as the June contract, how would you make money?

How would things change if the dividend yield is 1%?

When would short-selling costs bite in this case?

What would the no-arbitrage window for a borrowing rate of 5.5% and a lending rate of 4.5%?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91774078

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