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Suppose you can borrow money at continuously compounded rate of 8% and invest it at 6%. A companys stock price is $100 today. Then the
Suppose you can borrow money at continuously compounded rate of 8% and invest it at 6%. A companys stock price is $100 today. Then the one-year forward price should lie between:
If in the above problem the interest rates are 5% and 4%, what is the price range in which the one-year forward price should be?
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