suppose that the dealer of a forward contract on a share of stock quotes a forward price

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suppose that the dealer of a forward contract on a share of stock quotes a forward price which is higher than the theoretical forward price

then ?

sell the forward contract, short sell the stock, lend the proceeds of the short sale

sell the forward contract, buy the stock, borrow the stock purchase pricem

buy the forward contract, short sell the stock, lend the proceeds of the short sale

buy the forward contract, buy the stock, borrow the stock purchase price

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Derivative Pricing

ISBN: 9780367734213

1st Edition

Authors: Ambrose Lo

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Posted Date: Feb 11, 2024 11:35 PM

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Derivative Pricing

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