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A stock index is currently valued at 50. The index pays dividends continuously at a rate proportional to the level of the index. The dividend

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A stock index is currently valued at 50. The index pays dividends continuously at a rate proportional to the level of the index. The dividend yield during the first 3 months is 2%, and the dividend yield after 3 months is 3%. The continuously compounded risk-free interest rate is 5%. For simplicity, take 1 month 112 years. Calculate the following: (a) Foos (S) (b) Fo,os (S) (c) Fo.3os (S), assuming that So.3 48 0,0.8 0.3,0.8 A stock index is currently valued at 50. The index pays dividends continuously at a rate proportional to the level of the index. The dividend yield during the first 3 months is 2%, and the dividend yield after 3 months is 3%. The continuously compounded risk-free interest rate is 5%. For simplicity, take 1 month 112 years. Calculate the following: (a) Foos (S) (b) Fo,os (S) (c) Fo.3os (S), assuming that So.3 48 0,0.8 0.3,0.8

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