Question: Please be carefull about long position. 3) A stock is expected to pay a dividend of $1.5 per share in two months and also in

Please be carefull about long position. 3) A stock is expected

Please be carefull about long position.

3) A stock is expected to pay a dividend of $1.5 per share in two months and also in five months. The stock price is $50, and the risk-free rate of interest is 7% per annum with continuous compounding for all maturities. An investor has just taken a long position in a seven-month forward contract on the stock. a. What are the forward price and the initial value of the forward contract? b. Three months later, the price of the stock is $54 and the risk-free rate of interest is still 7% per annum. What are the forward price and the value of the long position in the forward contract

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