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You enter into a long position in a one-year forward contract on a stock today when the stock price is $150, and the risk-free rate
- You enter into a long position in a one-year forward contract on a stock today when the stock price is $150, and the risk-free rate of interest is 2% per annum with continuously compounding for all maturities. This stock pays dividend of $1 per share in 3-month and in 9-month.
There is no arbitrage on the market. What are the forward price and the initial value of the forward contract?
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Extinction Governance Finance And Accounting
Authors: Jill Atkins, Martina Macpherson
1st Edition
0367492989, 978-0367492984
