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Suppose XYZ stock pays no dividends and has a current price of $50. The forward price for delivery in 1 year is $55. Suppose the

image text in transcribed Suppose XYZ stock pays no dividends and has a current price of $50. The forward price for delivery in 1 year is $55. Suppose the 1 -year effective annual interest rate is 10%. (a) What is the payoff in 1 year for stock prices of $40,$45,$50,$55,$60, and $65 ? (b) Graph the payoff diagrams for the one-year forward contract. (c) Is there any advantage to investing in the stock or the forward contract? Why? (d) Suppose XYZ pays a dividend of \$2 per year and everything else stays the same. Now is there any advantage to investing in the stock or the forward contract? Why

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