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A nondividend-paying stock has a current price of 100, and the effective annual interest rate is 5%. 1S (a) Consider a forward contract that delivers
A nondividend-paying stock has a current price of 100, and the effective annual interest rate is 5%. 1S (a) Consider a forward contract that delivers one share of the stock after 1 year. Calculate the theoretical 1-year forward price. (b) Suppose you observe a forward price of 104. What arbitrage opportunity would you undertake
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Mergers And Acquisitions Integration Handbook
Authors: Scott C. Whitaker
1st Edition
111800437X, 978-1118004371
