Calculate the appropriate price

Reference no: EM13980938

Consider an asset currently worth $100. An investor plans to sell it in one year and is concerned that the price may have fallen significantly by then. To hedge this risk, theinvestor enters into a forward contract to sell the asset in one year. Assume that therisk-free rate is 5 percent.

A. Calculate the appropriate price at which this investor can contract to sell the asset in one year.

Reference no: EM13980938

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