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. Assume an asset sells in the spot market for a price of $ 9 0 , the risk - free rate is 3 %
Assume an asset sells in the spot market for a price of $ the riskfree rate is and the forward contract expires in months. What is the initial value of the contract and the correct forward price?
b Using the forward contract from part a the underlying price is $ three months later. Now what is the value of the contract?
c Assume an asset sells in the spot market for a price of $ The riskfree rate is and the forward contract on the asset expires in months. The asset pays a dividend of $ and storage costs are $ a year, both of which are in present value form. What is the correct forward price?
d Using the forward contract from part c the underlying price is $ three months later. Now what is the value of the contract?
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