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How can structure an arbitrage position

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Reference no: EM133009473

Problem 1: Suppose the current price on a stock is $50, the stock has an annual dividend yield of 3%. The risk-free rate is 4%. If a futures contract on this stock is available with a 6-month maturity, what should its price be? If the future price in the market is $52, how can you structure an arbitrage position? How much would be your arbitrage profit?

Reference no: EM133009473

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