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The following data relate to R Ltd.'s share price: Current price per share * 1,900 6 months future's price/share * 2050 Assuming it is
The following data relate to R Ltd.'s share price: Current price per share * 1,900 6 months future's price/share * 2050 Assuming it is possible to borrow money in the market for transactions in securities at 10% per annum, (i) advise the justified theoretical price of a 6-months forward purchase; and (ii) evaluate any arbitrage opportunity, if available.
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Intermediate Accounting principles and analysis
Authors: Terry d. Warfield, jerry j. weygandt, Donald e. kieso
2nd Edition
471737933, 978-0471737933
