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The current price of a stock is $180, and the continuously compounded risk-free interest rate is 3%. A dividend will be paid every year for
The current price of a stock is $180, and the continuously compounded risk-free interest rate is 3%. A dividend will be paid every year for the next 3 years, with the first dividend occurring 1 year from now. The amount of the first dividend is $7, but each subsequent dividend will be 4% higher than the one previously paid. Calculate the fair price of a 3-year forward contract on this stock
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