Question: Suppose the stock price is 35 and the continuously compounded

Suppose the stock price is $35 and the continuously compounded interest rate is 5%.
a. What is the 6-month forward price, assuming dividends are zero?
b. If the 6-month forward price is $35.50, what is the annualized forward premium?
c. If the forward price is $35.50, what is the annualized continuous dividend yield?

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  • CreatedAugust 12, 2015
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