Question
suppose that the dealer of a forward contract on a share of stock quotes a forward price which is higher than the theoretical forward price
suppose that the dealer of a forward contract on a share of stock quotes a forward price which is higher than the theoretical forward price
then ?
sell the forward contract, short sell the stock, lend the proceeds of the short sale
sell the forward contract, buy the stock, borrow the stock purchase pricem
buy the forward contract, short sell the stock, lend the proceeds of the short sale
buy the forward contract, buy the stock, borrow the stock purchase price
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Finance Directors Handbook
Authors: Glynis D Morris, Sonia McKay, Andrea Oates
5th Edition
1566768691, 978-1566768696
