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An investor entered into a long forward contract 2 months ago to buy a stock in 6 months. The contracted delivery price is $40 and
An investor entered into a long forward contract 2 months ago to buy a stock in 6 months. The contracted delivery price is $40 and will be expired in 4 months. The stock just paid a dividend of $1. The current contract price for 4 months forward contract is $44.9. The risk-free interest rate is 10% per annum continuously compounded. What is the value of the long forward contract today?
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