A stock is expected to pay a dividend of $1 per share in 2 months and in 5 months. The price is $50, and risk-free rate of interest is 8% per annum with continuous compounding for all maturities. An investor has taken short position in a 6-month forward contract on the stock.

a) What are the forward price and initial value of contract? b

Three Months later, the price is 48 dollars and Rf= 8%. What are the price and values now and what is your advice to investor.