Forward price and the value of the short position

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A stock is expected to pay a dividend of $1 per share in 2 months and in 4 months. The stock price is $50, and the risk-free interest rate is 8% per annum with continuous compounding for all maturities. An investor has just taken a long position in a 6-month forward contract on the stock. What are the forward price and the initial value of the forward contract? Three months later, the price of the stock is $48 and the risk-free rate interest is still 8% per annum. What are the forward price and the value of the short position in the forward contract?

Reference no: EM132795901

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