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An 11-month forward contract is issued on 1 March 2008 on a stock with a price of 10 per share at that date. Dividends of
An 11-month forward contract is issued on 1 March 2008 on a stock with a price of 10 per share at that date. Dividends of 50 pence per share are expected to be paid on 1 April and 1 October 2008.
Calculate the forward price at issue, assuming a risk-free rate of interest of 5% per annum effective and no arbitrage.
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