1) You anticipate the receipt of money in 190 days, which you will use to purchase stocks in a particular company. The stock is currently selling for $51 and will pay a $0.5 dividend in 50 days and another $0.6 in 140 days.The risk-free rate is 3% (with continuous compounding) for all maturities. You go long a forward contract on the stock.

a)At what price would you be willing to buy the stock in 190 days through a forward contract?

b)Suppose you agree to the contract at the price you found in the previous part. 60 days later, the stock has fallen to $44.91. What is the value of the forward contract?

c)What is the new forward price?

2)The current exchange rate between the dollar and the pound is $1.27 per pound, and the 4-month forward exchange rate is $1.26 per pound. The 4-month risk-free interest rates is 3% in the U.S., with continuous compounding.

What is the 4-month risk-free rate in Britain (with continuous compounding)?

Please answer all parts of both! Will leave feedback!