If the Stock Index Is at 148,the Three-Month Futures Price

Multiple Choice

If the stock index is at 148,the three-month futures price is 151,the dividend yield is 5 percent and the interest rate is 8 percent,determine the profit from an index arbitrage if the stock ends up at 144 at expiration.(Ignore transaction costs. )

A) 1.89
B) 4.00
C) 7.00
D) 5.11
E) -7.00