The borrowing rate is equal to 1.5% per quarter. Thus, if you borrow $100 for one quarter you will owe $101.50 at the end of the quarter. The lending rate is 0.25% per quarter. Thus, if you lend $100 for one quarter you will receive a payoff of $100.25 at the end of the quarter.

Six-month cash-settled forward contracts on the shares of NG Corp are traded.

The bid price for NG Corp shares is $45. The ask price for NG Corp shares is $45.50.

The brokerage commission to either buy or sell shares is $0.50 per transaction, regardless of how many shares are traded. Commissions on share trades are paid at the time of the share trade. NG Corp will not pay any dividends over the coming six months. The brokerage commission to trade a forward contract is $0.05 per contract. That commission is paid only once at the time of setting up the position. The size of a forward contract is 100 shares.

A lower bound on the ask price for a forward contract is such that if some trader were willing to sell you the contract for less than the lower bound, you could lock in an arbitrage profit by selling relatively over-valued shares in NG Corp and simultaneously buying relatively under-valued forward contracts on NG Corp. A lower bound on the ask price per share of a single six-month cash-settled forward contract NG Corp shares is, rounded to two decimal places:

Group of answer choices

A. None of the other answers is correct.

B. $45.10

C. $44.99

D. $45.25

E. Equal to the ask price of the underlying share; i.e., $45.50