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On Jan 1 2017 the price of a stock S was quoted for sale on the Ecuador stock market at $37. Ecuador's stock market settlement
On Jan 1 2017 the price of a stock S was quoted for sale on the Ecuador stock market at $37. Ecuador's stock market settlement convention is T + 3 months. Suppose all interest rates are 5% per month, no matter how many days in the month, to be compounded for longer periods. How would they quote the stock price if Ecuador changes its settlement convention to T+ 2 months? Assume the year consists of 12 months each 30 days long.
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