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Determine the forward value of long position

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Reference no: EM132938456

Problem 1: An investor was taken a long position in a 1-year forward contract on Metropolis stock with the price of RM14.89. The current stock price at that time was RM15.00. The risk free of interest is 10% per annum with continuous compounding for all maturities. Assuming 6-month later, the price of Metropolis stock increases to RM16.00. Determine the forward value of long position in the forward contract.

Select one:

A. RM0.23
B. RM1.84
C. RM1.73
D. RM1.11

Reference no: EM132938456

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