For a 10 month forward contract on a stock when the stock price is 40 with the risk free rate of interest continuously compounded is 6 per annum for all maturities and the dividends of 0 60 per share expected after 3 months, 6 months and 9 months Calculate the price of the 10 month forward contract Why does the forward contract price must be exactly equal to the calculated number in regards to the assumptions of arbitrage opportunity

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Question: For a 10-month forward contract on a stock when the stock price is 40 with the risk-free rate of interest continuously compounded is 6% per

For a 10-month forward contract on a stock when the stock price is 40 with the risk-free rate of interest continuously compounded is 6% per annum for all maturities and the dividends of 0.60 per share expected after 3 months, 6 months and 9 months:

Calculate the price of the 10-month forward contract. Why does the forward contract price must be exactly equal to the calculated number in regards to the assumptions of arbitrage opportunity?

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