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At an annual continuously compounded interest rate of 5%, a non-dividend-paying stock is currently trading at $50 per share and the 9-month forward price for
At an annual continuously compounded interest rate of 5%, a non-dividend-paying stock is currently trading at $50 per share and the 9-month forward price for the stock is $52 per share. An investor shorts a share of the stock and invests the short sale proceeds at current interest rate, and buys the forward on a share of the stock. What is the investor's profit / loss in 9 months? Loss of $0.09 Profit of $0.09 Profit of $0.30 Loss of $0.30 The investor breaks even (neither profit nor loss)
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