The current price of stock XYZ is $80. A one-year forward contract on stock XYZ has a
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The current price of stock XYZ is $80. A one-year forward contract on stock XYZ has a price of $84. Stock XYZ is expected to pay a dividend of $2 six months from now and a dividend of $3 one year from now, immediately before the one-year forward contract expires. Calculate the effective annual risk-free interest rate, assuming that it is non-negative.
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