Mr.

Mr. Sharma is an arbitrageur analyzing the equity derivatives market on 31 December 2010. He is specifically looking at the pricing of ACC stock and its corresponding futures contract. He has gathered the following market data:

Spot Price: The price of ACC stock in the cash market is ₹ 220.
Futures Price: The March 2011 futures contract on ACC stock is currently trading at ₹ 230.
Time to Expiration: The futures contract expires in 3 months (0.25 year).
Borrowing Rate: The risk-free borrowing rate available to Mr. Sharma is 15% p.a.
Dividend: ACC has declared an annual dividend of 25%, which is payable before 31 March 2011.
Face Value: The face value of the ACC stock is ₹ 10.

Mr. Sharma wants to use the Cost of Carry model to determine if there is a mispricing in the futures contract and how he might profit from it.