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Determine the forward value of long position

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Question - 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.

A. RM0.23

B. RM1.84

C. RM1.73

D. RM1.11

Reference no: EM133041631

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