Question: Q3. Consider a 10-month forward contract on Chrysler Ltd. stock with a price of Rs.80. Assume that the risk-free rate of interest (continuously compounded) is

Q3. Consider a 10-month forward contract on Chrysler Ltd. stock with a price of Rs.80. Assume that the risk-free rate of interest (continuously compounded) is 12% per annum for all maturities. Also assume that dividends of 1.25 rupees per share are expected after three months, six months, and nine months. Find the forward price of the contract. (10 marks)

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