Compute the six-month synthetic forward price

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Reference no: EM133264349

Question: Suppose a stock is selling for $100/share today and the stock pays a $2 dividend in 3 months. The interest rate for borrowing and lending from money market is constant at 5% per annum, in simple rate. List the transactions you need to take in the spot and money market to construct a synthetic long forward on this stock. Compute the six-month synthetic forward price.

Reference no: EM133264349

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