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First part of the question is cut-off. This is what the first sentences say "Today is May 23, 2016. The spot rate for British pounds is 1.9032 CAD/pound. The Canadian risk-free rate is 0.52% and the British risk-free rate is 0.45%. Both risk-free rate are compounded continuously.

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compounded continuously. The vote by the British population for U.K. exit from the Europe
Union (commonly referred to as Brexit) will occur in exactly one month. Due to the
uncertainty from this event, market volatility on the British pounds futures is quite high. As
an example, the British pound futures contract, which expires on September 23, is priced
below the spot rate at 1.4497CAD/f. The futures contract size is 62,500 British pounds. Is
the futures contract incorrectly priced? If so, construct a risk-free arbitrage strategy to take
advantage of the mispricing. Assume there are 365 days in the year, and the Canadian
dollar is the domestic currency.

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