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A one year long forward contract on a non dividend paying stock is entered into when the stock price is $40 and the risk free interest rate is 10% with continuous compounding

a) What is forward price?

b) Six month later the price of the stock is $45 and risk free interest rate is still same. What are the forward prices and the value of the forward contract?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M939005

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