Q2. A stock is expected to pay a dividend of $2 per share in 2months and 5 months. The stock price is $50

and the risk-free rate is 6% per year for all maturities. An investor has just taken a short position in a 6-month forward contract on the stock.

a. What are the forward price and the initial value of forward contract?

b. Three months later. the price of the stock is $48 and the risk-free rate of interest is still 6% per year.

What are the forward price and the value of short position in the forward contract?