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1. Suppose we buy 100 shares of stock BLAH for $35 per share. Further suppose that BLAH has a continuous dividend yield of 1.5%, and

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1. Suppose we buy 100 shares of stock BLAH for $35 per share. Further suppose that BLAH has a continuous dividend yield of 1.5%, and assume the dividends are re-invested in BLAH. (1) How many shares of BLAH do we own after three years? (2) If BLAH is trading at $30 at one year, what is the value of our holding in BLAH at that time? 2. Consider a 6 month forward contract on a stock with current spot price S(0) = 150. If the forward price is F = 155 and the continuous interest rate is r = 3% find the continuous dividend yield, 8, implied be these quantities

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