(Solution) - The S R index spot price is 1100 and the continuously -(2025 Original AI-Free Solution)

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The S&R index spot price is 1100 and the continuously compounded risk-free rate is 5%. You observe a 9-month forward price of 1129.257.
a. What dividend yield is implied by this forward price?
b. Suppose you believe the dividend yield over the next 9 months will be only
0.5%. What arbitrage would you undertake?
c. Suppose you believe the dividend yield will be 3% over the next 9 months.
What arbitrage would you undertake?