Question
Shares in Acme Inc will pay dividends of 38 cents and 32 cents, in 5 and 11 months, respectively. The current interest rate is 1.70%,
Shares in Acme Inc will pay dividends of 38 cents and 32 cents, in 5 and 11 months, respectively. The current interest rate is 1.70%, with continuous compounding. The current price of Acme Inc shares is $6.91. What is an appropriate price for a forward contract on Acme Inc, maturing in 16 months?
| 6.18 | ||
| 6.36 | ||
| 6.68 | ||
| 7.07 |
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The Economics Of Money Banking And Financial Markets
Authors: Frederic Mishkin
13th Global Edition
1292409487, 978-1292409481
