Forward price and value of forward contract

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A 6-month long forward contract on a on-dividend-paying stock is entered into when the stock price is $30 and the risk-free rate of interest is 10% per annum with continuous compounding.

1. What are the forward price and the initial value of the forward contract.2. 2 months later, the price of the stock is $25 and the risk-free rate of interest is still 10%. What are the forward price and the value of the forward contract.3. 6 months later (at maturity), the price of the stock is $35 and the risk-free rate of interest is still 10%. What are the forward price and the value of the forward contract.

Reference no: EM133068525

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