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At 11:00 pm EST you notice the following for AAPL stock and futures: AAPL=$117, AAPL Futures(1 year)= $115, contract size 1 stock, LIBOR(1 year) = 2%, AAPL dividend yield = 3%. %3D %3D Describe how you would conduct arbitrage using the above information. Show profits realized in 1 year.

At 11:00 pm EST you notice the following for AAPL stock and futures: AAPL=$117, AAPL Futures(1 year)= $115, contract size 1 stock, LIBOR(1 year) = 2%, AAPL dividend yield = 3%. %3D %3D Describe how you would conduct arbitrage using the above information. Show profits realized in 1 year.

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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At 11:00 pm EST you notice the following for AAPL stock and futures: AAPL=$117, AAPL Futures(1 year)= $115, contract size 1 stock, LIBOR(1 year) = 2%, AAPL dividend yield = 3%. %3D %3D Describe how you would conduct arbitrage using the above information. Show profits realized in 1 year.
Transcribed Image Text:At 11:00 pm EST you notice the following for AAPL stock and futures: AAPL=$117, AAPL Futures(1 year)= $115, contract size 1 stock, LIBOR(1 year) = 2%, AAPL dividend yield = 3%. %3D %3D Describe how you would conduct arbitrage using the above information. Show profits realized in 1 year.
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