Explain the cost-of-carry model

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Reference no: EM131457962

Question: a. Explain the cost-of-carry model with dollar dividends in your own words.

b. Justify why the spot price considered in the model is net of the present value of all future dividends paid over the life of the contract.

c. Why don't we adjust for dividends that are paid after the forward's maturity date?

Reference no: EM131457962

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