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A long forward contract on a non - dividend - paying stock was entered into some time ago. It currently has six months to maturity.

A long forward contract on a non-dividend-paying stock was entered into some time ago. It currently has six months to maturity. The risk-free rate of interest (with continuous compounding) is 10% per annum., the stock price is $25, and the delivery price $24. In this case S0=25, r=0.10, T=0.5, and K (i.e., F0)=24.
a) What is the value of the forward contract?
b) What is the value of the contract in three months (if S3=$30)  .

 

 
 

 

  

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