The index is standing at 400 and the futures price for a, Financial Management

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The index is standing at 400 and the futures price for a

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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Financial Management: The index is standing at 400 and the futures price for a

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