(Mark Value = 3) 2. Suppose that stock X is currently priced at 40 per share and the company has announced that it is go
Posted: Sat Feb 26, 2022 9:12 am
(Mark Value = 3)
2. Suppose that stock X is currently priced at 40 per share and
the company has announced that it is going to pay a dividend of 0.3
per share after 1 months. You purchase 100 shares of stock X and
invest all dividends received at a continuously compounded
risk-free interest rate of 5%. After 3 months, you sell the stock
when the stock price is 45.4.
Calculate the 3-month profit.
show work
2. Suppose that stock X is currently priced at 40 per share and
the company has announced that it is going to pay a dividend of 0.3
per share after 1 months. You purchase 100 shares of stock X and
invest all dividends received at a continuously compounded
risk-free interest rate of 5%. After 3 months, you sell the stock
when the stock price is 45.4.
Calculate the 3-month profit.
show work