Consider asset X paying dividends D = $1 per share each three months. The last...
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Consider asset X paying dividends D = $1 per share each three months. The last dividend has just been paid and spot price quotes at $140, while 1-year forwards trade at f=$148. Consider a 10% p.a. flat term structure of continuously compounded rates of interest. 1) Calculate the theoretical 1-year forward price. 2) Is there any arbitrage opportunity? Please, develop your argument. 3) Would your answer to question 2) change if X additionally requires a storage cost offsetting side benefit D?
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