(Solved): A stock is trading for $50 per share and is expected to pay a $0.20 dividend in 1 month. A futures ...

A stock is trading for $$\$50$$ per share and is expected to pay a $$\$0.20$$ dividend in 1 month. A futures contract with delivery in 3 months is priced at $$\$49.80$$. Assume a continuously compounded riskless rate of $$1\%$$. What is the arbitrage trading strategy and cash flows? Hint: [Step 1] First, determine the no-arbitrage price. [Step 2] Determine the arbitrage strategy