Question
A 9-month forward price on a non-dividend paying stock is entered into. What is the forward price if the spot price is $20 and the
A 9-month forward price on a non-dividend paying stock is entered into. What is the forward price if the spot price is $20 and the risk free interest rate (with continuous compounding) is 4% per year? Six months later the stock price is $30 and the risk free rate is still 4%, what is the value of the forward agreement?
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Analysis For Financial Management
Authors: Robert C. Higgins
10th International Edition
007108648X, 9780071086486
