1. The current price of Adelphia Communications stock is $64 per share. An investor who owns 5,000 shares plans to liquidate the position for a down payment on a home in 3 months and is concerned about a decline in the price in the interim. The investor contacts a dealer and receives a quote on a forward contract on Adelphia stock. No dividend payments are expected over the life of the forward contract.
   1. Which side of the forward contract is appropriate for the investor, long or short? (1 point)
   2. If the risk-free rate is 4.75% compounded annually, what is the no-arbitrage forward price per share for the 3-month forward contract? (1 point)

Assume the investor entered the appropriate position in the forward contract at the no-arbitrage price computed in part b. One month has now elapsed, the risk-free rate is now 4.50%, and the price of Alephia stock is now $59. What is the value of the investors 5,000 share forward position?