Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

2 decimal numbers The current price of the underlying instrument is 1000 PLN. In a year (right before the expiry of the forward contract) this

image text in transcribed
2 decimal numbers
The current price of the underlying instrument is 1000 PLN. In a year (right before the expiry of the forward contract) this instrument will bring a dividend of PLN 70. In half a year the investor should bear the cost of storage of this instrument in the amount of PLN 50. If the current semi-annual interest rate is 4% (continuous interest rate) and the current annual interest rate is 5% (continuous interest rate), what should be the current forward price of this contract with time to maturity 1 year? 5- 1000 Wybierz jedn odpowied: a. 1069.75 PLN b. 1072.30 PLN 0.04.0.5 F=? p = 70 r = 4% m: 2 2 U= 50 e 5o = (1000 40.83) e Yox 83 c. 1030.25 PLN d. 1032.79 PLN 0.05. ^ The current market quotation of a share is 36 PLN. The share is expected to pay dividend at the continous rate 104 TE

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Certified Lease And Finance Professionals Handbook

Authors: Deborah Reuben, Certified Lease & Finance Professionals, Equipment Finance Industry Experts

6th Edition

171743388X, 978-1717433886

More Books

Students also viewed these Finance questions

Question

Draft a proposal for a risk assessment exercise.

Answered: 1 week ago