The current stock price of BYG Corporation is $25.90 per share. The stock does not pay dividends.

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The current stock price of BYG Corporation is $25.90 per share. The stock does not pay dividends. The interest rate for continuous compounding is 2.9%. Bank Paribas is quoting $24.07 per share for a 6-month forward contract on BYG stock.

An analyst at a hedge fund has identified the Bank Paribas quote as an arbitrage opportunity.

Assuming the analyst is correct, what is the arbitrage profit per share at the expiration date of the forward contract?

Related Book For answer-question

Fundamentals of Financial Management

ISBN: 978-1285867977

14th edition

Authors: Eugene F. Brigham, Joel F. Houston

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Posted Date: Jul 08, 2023 01:36 AM

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The current stock price of BYG Corporation is $25.90 per share. The stock does not pay dividends.

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Fundamentals of Financial Management

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