Alphamerical Inc. stock is expected to pay $1, $1.20, $1.50 and $1.80 in dividends over the coming four quarters and current stock price is $56.The continuously compounded interest rate is 2% per year.

a.What is the correct price of a one year forward?

b.What is the value of a one-year long forward position at initiation?

c.What is the value of the same position in six months if the stock is trading at $53 in the spot market? No changes in dividends or interest rate expectationsare assumed in the calculation.