Question: Suppose you enter into a six month forward contract on a non-dividend paying stock when the stock price is $45 and the risk free interest

Suppose you enter into a six month forward contract on a non-dividend paying stock when the stock price is $45 and the risk free interest rate with continuous compounding is 9% per annum. What is the forward price?

	A) $46.98
	B) $49.23
	C) $47.07
	D) $45.00

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

The following exercises are based on the Colonial Adventure Tours database shown in Figures 1-15 through 1-19 in Chapter 1. No computer work is required. 1. Using the types of entities found in the...

A derivative is a contract between two or more parties whose value is based on an agreed-upon underlying financial asset (like a security) or set of assets (like an index). Common underlying...

4 . 3 Suppose that you entered into a 6 - month forward contract on a non - dividend paying stock when the stock price is $ 2 5 , the delivery price is $ 2 4 and the interest rate ( with continuous...

Suppose that you enter into a six month forward contract on a non-dividend-paying stock when the stock price is $30 and the risk-free interest (with continuous compounding) is 12% per annum. What is...

8. Suppose 'X': enters into a six-month forward contract on non dividend paying stock when stock price is $ 50 and risk-free rate of interest is 14% pia. Calculate forward price 9. A one year futures...

finance derivative questions A one-year long forward contract on a non-dividend paying stock is entered into when the stock price is $40 and the risk-free rate of interest is 10% per annum with...

Question 3 (2 points) Suppose that you enter into a 6-month forward contract on a non-dividend paying stock when the stock price is $30 and the risk-free interest rate (with continuous compounding)...

Can someone help me to do the sample exam? urgent thank you Student Name ________________________ Student Number ________________________ Bus 316 Final Exam, December 2011 CAUTION In accordance with...

I hope someone can help me finish those qusetions as soon as possible. Thank you Student Name ________________________ Student Number ________________________ Bus 316 Final Exam, December 2011...

Question 5 (2 points) Suppose that you enter into a 6-month forward contract on a non-dividend paying stock when the stock price is $30 and the risk-free interest rate (with continuous compounding)...

1) A stock is expected to pay a dividend of $0,92 per share in 1 month and in 4 months. The stock price is $50, and the risk-free rate of interest is 4,2% per annum with continuous compounding. What...

According to the ideal gas law, a 0.9249 mol sample of xenon gas in a 1.135 L container at 269.1 K should exert a pressure of 17.99 atm. By what percent does the pressure calculated using the van der...

The graph represents the velocity as a function of time for an object in one-dimensional motion. Identify which statement below correctly describes the motion at t = 3 s. v (m/s) +5 3. (s) -5 The...

15 a This is part of Helena's homework. Carry on with Helena's homework to find the correct value for .x. b b. y is an integer. Use the same method as Helena to work out the value of y when yx7=99 8...

The first scenario will be a Verbal Judo scenario in which your scenario follows the standard Verbal Judo interaction: You need to ask somebody to modify their behavior either to do something or to...

5. Describe three different approaches to performance appraisal and comment critically on the benefits to be gained from these systems.

4. Performance management is described by Armstrong and Baron (2004) as a process which contributes to the effective management of individuals and teams in order to achieve high levels of...

2. What approach would you use as a way of ensuring good performance which is consistent with the ethos of the organisation among these volunteers?