Question
A share currently trades at $10 and will pay a dividend of 50 cents in one months time. An investor, who is taking a long
A share currently trades at $10 and will pay a dividend of 50 cents in one months time. An investor, who is taking a long position in a six-month forward contract, can make a risk-free profit given that the risk-free force of interest is 3% per annum. What would be the range of possible values for the forward price of this six-month forward contract?
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