the second part please

1. Assume the continuously compounded interest rate is 4%. XYZ corporation stock does not pay dividends and is currently trading at $20. You enter into a long forward contract to buy XYZ stock in one year. What is closest to the fair price for this long forward?
   1. $20
   2. $20.25
   3. $20.50
   4. $20.75
   5. $21

Suppose immediately after signing the agreement in the previous question, the continuously compounded interest rate jumps to 10%, and the stock price rises to $22. You wish to terminate your agreement. What is closest to a fair payment from your counterparty to you to terminate the agreement? (A negative number would reflect a payment from you to the counterparty.) a. -$3 b. -$1 c. $0 d. $1 e. $3