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Assume that the underlying asset is an investment asset with no storage cost. The information of the stock price, maturity of the forward contract, and

Assume that the underlying asset is an investment asset with no storage cost. The information of the stock price, maturity of the forward contract, and risk-free rate is provided below:

Stock/Spot Price

S0

$120

Maturity date of Forward Contract (2 years)

T

2

Risk-free Rate

r

4%

Based on the above information and the cost of carry model, which of the following is closest to the correct No-Arbitrage Forward Price (F0)?

  1. 129.99
  2. 110.77
  3. 0
  4. 9.60

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