5. Suppose the S\&P 500 Index portfolio pays a dividend yield of 2% annually. The...
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5. Suppose the S\&P 500 Index portfolio pays a dividend yield of 2% annually. The index currently is 1,800 . The T-bill rate is 3%, and the S\&P futures price for delivery in one year is $1,833. Construct an arbitrage strategy to exploit the mispricing and show that your profits one year hence will equal the mispricing in the futures market. (LO 17-4)
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