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Assume the continuously compounded interest rate is 4%. XYZ corporation stock does not pay dividends and is currently trading at $20. You enter into a

  1. Assume the continuously compounded interest rate is 4%. XYZ corporation stock does not pay dividends and is currently trading at $20. You enter into a long forward contract to buy XYZ stock in one year. What is closest to the fair price for this long forward?
    1. $20
    2. $20.25
    3. $20.50
    4. $20.75
    5. $21

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