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Suppose that Goldman Sachs sells a one-year forward contract on a non-dividend paying stock to sn investor. suppose also that the one year forward price
Suppose that Goldman Sachs sells a one-year forward contract on a non-dividend paying stock to sn investor. suppose also that the one year forward price for the contract is $100. True or false: to hesge its exposure, goldman sachs should short the stock in the spot market and purchase a risk free zero coupon bond with face value of $100 and maturity of one year.
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