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The current price of a share of stock is 5 and the stock is

The current price of a share of stock is 5, and the stock is expected to pay a dividend of 1 per share in 2 months and again in 5 months. The risk free annual effective rate of interest is 6%.

A) calculate the fair price of a 6 month forward contract.

B) at time 3 months from now, suppose the stock price is 57. Compute the fair price of the same forward contract at that time.

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Finance Basics: The current price of a share of stock is 5 and the stock is

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Finance Basics: The current price of a share of stock is 5 and the stock is

Reference No:- TGS0628285

Have a Question? (oR Write a Review)

Recent Questions Asked Finance Basics

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Request for Solution File

Ask an Expert for Answer!!

Finance Basics: The current price of a share of stock is 5 and the stock is

Reference No:- TGS0628285

Recent Questions Asked Finance Basics

Q : A platinum rtd with alpha 00039 is used with an instrument

Q : If a bankers spread is 65 of the total issue size with

Q : Find the prepaid forward price and the forward price of a

Q : Why is anhydrous sodium sulfate added to the organic

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Q : A 60-turn coil carries a current of 2a and lies in the

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