Ans:E, Forward price=current stock price*(1+i) (assume no dividend)
For this question, forward means expect stock price up. You won't expect the stock price below $105(e.g. $101) and still purchase $105 forward
I think you may not understand what is "No arbitrage"
No arbitrage means the derivative product is pricing correctly. So you don't have chance to gain profit immediately.
We use forward to do Hedging. It means we can gain money in forward but lose some in asset. Where gain=lose.
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