The spot price of an asset is $50. The expected return on the asset is 10% a
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The spot price of an asset is $50. The expected return on the asset is 10% a year (in simple terms) and the standard deviation of these returns is 20%. The risk-free rate of interest is 5% a year in simple terms. Assuming no costs or benefits of carry, what is the one-year forward price of the asset? (a) $52.50 (b) $55.00 (c) $57.50 (d) $60.00\n
Related Book For
Applied Statistics and Probability for Engineers
ISBN: 978-1118539712
6th edition
Authors: Douglas C. Montgomery, George C. Runger
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