A long forward contract on a dividend-paying stock was entered some time ago. It currently has 12 months to maturity. Th

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answerhappygod
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A long forward contract on a dividend-paying stock was entered some time ago. It currently has 12 months to maturity. Th

Post by answerhappygod »

A long forward contract on a dividend-paying stock was entered
some time ago. It
currently has 12 months to maturity. The risk-free rate of interest
with quarterly
compounding is 6.05 % per annum for all maturities. The delivery
price is $95. The stock
price is $100, dividends of $2.00 per share are expected after 3
months, 6 months, and 9
months. What is the value of this long forward contract?
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