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Suppose the risk - free rate r is constant. By directly computing the expectation in the risk - neutral pricing formula, show that at time

Suppose the risk-free rate r is constant. By directly computing the expectation in the
risk-neutral pricing formula, show that at time 0, the value (that is, the no arbitrage price) of a forward
contract on a non-dividend paying stock with current price S0, delivery price K, and maturity time T is
given by
f0= S0 KerT .
You are not allowed to use the no arbitrage arguments in Week 5 Notes, pg 9. Your proof should be a
few lines at most.

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