Use the Following Information to Answer the Question(s)below

question 8

Essay

Use the following information to answer the question(s)below.
An exchange traded fund (ETF)is a security that represents a portfolio of individual stocks.Consider an ETF for which each share represents a portfolio of two shares of Apple Inc.(APPL),one share of Google (GOOG),and ten shares of Microsoft (MSFT).Suppose the current stock prices of each individual stock are as shown below:
-If the ETF is currently trading for $1300,what arbitrage opportunity is available? What trades would you make?

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Definitions:

Capital Lease Obligation

A lease classified as a financial transaction where the lessee essentially buys an asset and borrows the funds through a lease.

Periodic Cash Payments

Regular financial payments made over a stipulated period, such as dividends or loan repayments.

Depreciation Expense

Methodically spreading out the expense of a physical asset across its period of usability.

Capital Lease

A lease classified as a purchase by the lessee, whereby the lessee records the leased asset as an owned asset on the balance sheet.