Question III.5. Suppose there is an index which price is S0 = $200; There is a risk-free rate rf = 3%; The dividend yie

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Question III.5. Suppose there is an index which price is S0 = $200; There is a risk-free rate rf = 3%; The dividend yie

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Question III.5.
Suppose there is an index which price is S0 = $200; There is a
risk-free rate rf = 3%; The dividend yield is 3%.
a)What should be the futures contract price with maturity of
one year?
B) Are there any arbitrage opportunities if F0 = $220? If so, how
to exploit them?
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