Question
Consider a 100-day forward contract on a non-dividend paying stock. The stock is currently trading at Sh. 700. The risk-free rate is 6%. Required (i)
Consider a 100-day forward contract on a non-dividend paying stock. The stock is currently trading at Sh. 700. The risk-free rate is 6%. Required (i) Calculate the no arbitrage forward price today. (ii)If the forward price was Sh. 720. Determine the arbitrage strategy.
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Financial Reporting And Statement Analysis A Strategic Perspective
Authors: Clyde P. Stickney, Paul Brown
4th Edition
0030238110, 978-0030238116
