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Assume that the current stock price of AAA firm is trading at $49. Moreover, assume that firm AAA pays no dividends. Moreover, the annual risk-free
Assume that the current stock price of AAA firm is trading at $49. Moreover, assume that firm AAA pays no dividends. Moreover, the annual risk-free interest rate is 7% with continuous compounding. what must be the price of the 6-month maturity futures contract written on AA stock in order to avoid arbitrage in the market.
A.50
B.50.49
c.48.44
D.49.51
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