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Q5 Q5 The interest rate is 0.12 per year compounded continuously. Adrian (who goes short) and Ziggy (who goes long) enter into a 22-month forward
Q5 Q5 The interest rate is 0.12 per year compounded continuously. Adrian (who goes short) and Ziggy (who goes long) enter into a 22-month forward contract on one share of Yelp stock when the stock is trading at $38.54. 8 months later, when the spot stock price is $52.41, Ziggy trades the existing long position to Mike. Determine the correct cash payment between Ziggy and Mike at t=8 months. Enter the answer as a positive number if Mike pays Ziggy, a negative number if Ziggy pays Mike, or zero if no cash payment is needed in this instance.
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