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4.1 Forward price Suppose the price of a stock is So = 100.5 at time to = O. The stock pays no dividends. Suppose also

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4.1 Forward price Suppose the price of a stock is So = 100.5 at time to = O. The stock pays no dividends. Suppose also the interest rate is r = 5.5%. Question: Calculate the fair value forward price at the time T=0.75 years. F = Ser(T-to) . . Suppose the price of a stock is So = 955 at time to = 0 and it pays a continuous dividend yield q = 1.1%. Suppose also the interest rate is r 5.1%. Question: Calculate the fair value forward price at the time T 0.65 years. F = Soe(r-q)(T-to)

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