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The current price of a stock is $200, and the continuously compounded risk-free interest rate is 4%. A dividend will be paid every year for
The current price of a stock is $200, and the continuously compounded risk-free interest rate is 4%. 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 $6, but each subsequent dividend will be 5% higher than the one previously paid.
Calculate the fair price of a 3-year forward contract on this stock.
Calculate the fair price of a 3-year forward contract on this stock.
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Finite Mathematics For Business Economics Life Sciences And Social Sciences
Authors: Raymond Barnett, Michael Ziegler, Karl Byleen, Christopher Stocker
14th Edition
0134862627, 9780134862620
