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Micron Technologies (MU) is currently trading at $81.93/share (S(0) = $81.93). A 6-month risk-free zero coupon bond with a $100 face value trades at $98.51.
Micron Technologies (MU) is currently trading at $81.93/share (S(0) = $81.93). A 6-month risk-free zero coupon bond with a $100 face value trades at $98.51. Assume that MU pays no dividends.
- What is the fair (no-arbitrage) 6-month forward price for a share of MU?
- Please describe the replicating portfolio that ensures this price.
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To determine the fair noarbitrage 6month forward price for a share of MU Micron Technologies we can use the concept of the forward price and the repli...
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Fundamentals of Investment Management
Authors: Geoffrey Hirt, Stanley Block
10th edition
0078034620, 978-0078034626
