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Business, 22.02.2020 04:31 hvbrown28

Problem 3 Suppose that the risk-free interest rate is 10% per annum with continuous compounding and that 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 405. What arbitrage opportunities does this create?

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Problem 3 Suppose that the risk-free interest rate is 10% per annum with continuous compounding and...
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