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Mr. Ali enter into a 6 month forward on Microsoft Stock (No dividend has been forecasted in the future). It is currently trading at $100

Mr. Ali enter into a 6 month forward on Microsoft Stock (No dividend has been

forecasted in the future). It is currently trading at $100 and the continuous

rate is 5% per year. What is the forward price?

After 3 months, the last traded price is $120. What is the price of a 3 month

forward now? Elaborate the strategy that Ali could chose to make a profit.

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