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1.Suppose you can borrow money at continuously compounded rate of 8% and invest it at 6%. A company's stock price is $100 today. Then the
1.Suppose you can borrow money at continuously compounded rate of 8% and invest it at 6%. A company's stock price is $100 today. Then the one-year forward price should lie between:
A.$106.18 and $108.33
B.$106.76 and $108.52
C.$107.22 and $109.16
D.$107.68 and $109.93
E.$108.00 and $110.12
1.If in the above problem the interest rates are 5% and 4%, what is the price range in which the one-year forward price should be?
A.$103.22 and $104.71
B.$103.87 and $104.93
C.$104.08 and $105.12
D.$104.72 and $105.83
E.None of the above
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