Question: A 2-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
A 2-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 continuous compounding at time 0. One year later, the price of the stock is $45 and the risk-free interest rate is still 10%. What are the forward price and the value of the forward contract
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