What the actual interest rate is based on the current mmm


Now suppose you don’t know what the actual interest rate is, based on the current MMM price, dividend rate, and the forward price what is the effective annual interest rate? Create a 2 year, zero coupon bond with a face value of $100 from a portfolio of stock and forward. That is, create a portfolio that costs a little less than $100 today, and at time T pays $100. Your answer should tell me exactly how many shares of stock and forward to go long/short.

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Financial Management: What the actual interest rate is based on the current mmm
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