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The information you collected from market is as follows:
The risk-free interest rate is 10% per annum with continuous compounding;
the dividend yield on a stock index is 4% per annum;
the index is standing at 400; and
the futures price for a contract deliverable in four months is 412.
Do you think there is an opportunity to arbitrage? And how do you do?

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M92315620

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