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Determining the arbitrage opportunity

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Reference no: EM132828352

Your old friend, Joe March, is a forwards and futures trader at Bank of America. You look up his quotes for Melvin Tech. melvin Tech is trading at $472.91, the monthly risk-free rate is0.25% per month, and March is quoting a forward price of $480.08 for a 6-month forward contract.

Melvin tech is not expected to pay a dividend in the next 6 months.

1. Is there an arbitrage opportunity?

2. What steps should you take to realize the arbitrage profits?

3. What are the arbitrage profits per share of Melvin Tech that could be realized today?

Reference no: EM132828352

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