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Business, 06.12.2019 06:31 ayeeeee98

Consider a long forward contract to purchase a non-dividend-paying stock in 3 months. assume the current stock price is $40 and the risk-free interest rate is an apr of 5% compounded quarterly. if the market forward price is $43, show explicitly the arbitrage opportunity.

note: this is not continuous compounding but discrete! so do not use the se^(rt) ( exponential formula)

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