Question
QUESTION 5 : a. The current stock price for ACME is $50/share and a dividend of $2 is expected in 2 months. Calculate the equilibrium
QUESTION 5:
a. The current stock price for ACME is $50/share and a dividend of $2 is expected in 2 months. Calculate the equilibrium price of a futures contract for 1 share of ACME due in 3 months if the interest rate is 3% p.a. (assume a flat term structure).
b. Show how to make riskless profits if the current futures price in (a) is $47. Detail all your cashflows and transactions.
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Rich Dads Increase Your Financial IQ Get Smarter With Your Money
Authors: Robert T. Kiyosaki
1st Edition
1612680658, 978-1612680651
