Question
Suppose the stock price is $36 and the continuously compounded interest rate is 5%. (a) Assuming dividends are zero, calculate the 6-month forward price. (b)
Suppose the stock price is $36 and the continuously compounded interest rate is 5%.
(a) Assuming dividends are zero, calculate the 6-month forward price.
(b) If the 6-month forward price is $36.50, what is the annualized forward premium?
(c) If the forward price is $36.50, calculate the annualized continuous dividend yield
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Using Econometrics A Practical Guide
Authors: A. H. Studenmund
7th edition
013418274X, 978-0134182742
