Question: 1. (15pt) Consider a forward contract whose underlying assets incur continuous income with rate q. We assume that the interest rate r and income rate

1. (15pt) Consider a forward contract whose underlying assets incur continuous

1. (15pt) Consider a forward contract whose underlying assets incur continuous income with rate q. We assume that the interest rate r and income rate q are continuously compounded. Derive the following formula: Fo = Soe(r9)T where Fo is the forward price, So is the initial price of the underlying asset, and T is the maturity of the forward contract

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