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

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Problem:

A one-year long forward contract on a non-dividend-paying stock is entered into when the stock price is $40 $38 and the risk-free rate of interest is; 8% per annum with continuous compounding.

Required:

Question 1: What are the forward price and the initial value of the forward contract?

Question 2: Six months later, the price of the stock is $45 46 and the risk-free interest rate is still 10%8%.What are the forward price and the value of the forward contract?

Note: Give you opinion citing relevant ethical principles.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91174762

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