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(20 points] A stock is expected to pay dividends of $5 per share in 2 months and 8 months for a total of $10. The

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(20 points] A stock is expected to pay dividends of $5 per share in 2 months and 8 months for a total of $10. The current stock price is $400 and the risk-free interest rate is 2% per annum with continuous compounding for all maturities. An investor has just taken a long position in a 12-month forward contract on the stock. Determine the fair forward price for the forward contract. (20 points] A stock is expected to pay dividends of $5 per share in 2 months and 8 months for a total of $10. The current stock price is $400 and the risk-free interest rate is 2% per annum with continuous compounding for all maturities. An investor has just taken a long position in a 12-month forward contract on the stock. Determine the fair forward price for the forward contract

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