Problema 2-year long forward contract on a, Ask an Expert

Finance

Problem:

A 2-year long forward contract on a non-dividend-paying stock is entered into when the stock price is $139 and the risk-free interest rate is 10.3% per annum with continuous compounding. 1 year later, the price of the stock is $146 and the risk-free rate is 9%.

Task:

Question: What is the value of the long forward contract? Explain in detail and show your all workings.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91146317

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