Assume the continuously compounded annual interest rate is 2%. XYZ corporation stock does not pay dividends and is currently trading at $30.

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Assume the continuously compounded annual interest rate is 2%. XYZ corporation stock does not pay dividends and is currently trading at $30. You enter into a forward contract to buy XYZ stock in one year. What is closest to the fair forward price for this contract?a.    $29b.    $29.50c.     $30d.    $30.50e.    $31

Question

Assume the continuously compounded annual interest rate is 2%. XYZ corporation stock does not pay dividends and is currently trading at $30.

  • Written in: 17-Oct-2019
  • Paper ID: 348496
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Oct 17, 2019

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