Verify that going long a forward contract and lending the present value of the forward price creates

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Verify that going long a forward contract and lending the present value of the forward price creates a payoff of one share of stock when
a. The stock pays no dividends.
b. The stock pays discrete dividends.
c. The stock pays continuous dividends.

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Derivatives Markets

ISBN: 9789332536746

3rd Edition

Authors: Robert McDonald

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Question Posted: Aug 12, 2015 02:33 AM

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Verify that going long a forward contract and lending the present value of the forward price creates

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a Description T oday At expiration of the contract Long forward 0 S T F 0 T S T S 0 e r T Lend S 0 S ...View the full answer

Derivatives Markets

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