Some time ago, you entered a forward contract to purchase 10 shares of Advanced Micro Devices, Inc.
Fantastic news! We've Found the answer you've been seeking!
Question:
Inc. (AMD) for $32 per share. Your forward contract ends in 6 months and the current spot price
of AMD is $29.42 per share. Assume a risk free rate of interest of 1% per year. (2.00 points)
(a) What is the current price of a forward which ends in 6 months?
(b) What is the value of your seasoned forward?
Suppose now the current spot price of AMD is $33.42 per share.
(c) What is the current price of a forward which ends in 6 months?
(d) What is the value of your seasoned forward?
Related Book For
Advanced Financial Accounting
ISBN: 978-0078025624
10th edition
Authors: Theodore E. Christensen, David M. Cottrell, Richard E. Baker
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