The cash- and- carry arbitrage becomes a risk arbitrage in the case of share futures because, unlike interest flows, dividend payments cannot be predicted exactly.

Name: The cash- and- carry arbitrage becomes a risk arbitrage in the case of share futures because, unlike interest flows, dividend payments cannot be predicted exactly.
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Question

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In share futures, dividends are uncertain and can affect the future price, making cash-and-carry arbitrage riskier compared to fixed interest flows.

The Cash- And- Carry Arbitrage Becomes a Risk Arbitrage in the Case