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6. For a stock index, you are given: i) The index pays dividends at a continuously compounded rate of 5%. ii) The continuously-compounded risk-free interest

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6. For a stock index, you are given: i) The index pays dividends at a continuously compounded rate of 5%. ii) The continuously-compounded risk-free interest rate is 3%. A fully leveraged purchase of the index requires a loan to be repaid after 6 months, at which time the borrower needs to repay 1500. Calculate the prepaid forward price of the index

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