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Review problem related to the stock

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Reference no: EM131637917

Question: Suppose that the price of a stock is $45 at the beginning of the year, the risk-free rate is 6%, and a $2 dividend is to be paid after half a year. For a long forward position with delivery in one year, find its value after 9 months if the stock price at that time turns out to be

a) $49,

b) $51.

Reference no: EM131637917

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