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4. One enters into a one-year forward contract on a non-dividend-paying stock when the stock price is $100 and the interest rate is 10% per

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4. One enters into a one-year forward contract on a non-dividend-paying stock when the stock price is $100 and the interest rate is 10% per annum with continuous compounding today. (a) Find the delivery price of the forward contract. 15 marks] (b) If the stock price is $90 and the rate is 12% per annum with continuous com- pounding after six months. Find the value of the forward contract for the short position at that time

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