The S&R index spot price is 1100, the risk-free rate is 5%, and the dividend yield on the index is 0. a. Suppose you observe a 6-month forward price of 1135. What arbitrage would you undertake? b....

The S&R index spot price is 1100, the risk-free rate is 5%, and the dividend yield on the index is 0.

a. Suppose you observe a 6-month forward price of 1135. What arbitrage would you undertake?

b. Suppose you observe a 6-month forward price of 1115. What arbitrage would you undertake?