What are the forward price and value of the forward contract

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You want to take a short position in a 15-month forward contract on a non-dividend-paying stock when the stock price is $42 and the risk-free rate of interest is 4% per annum with continuous compounding. a) What are the fair forward price and value of the forward contract at initiation? b) Seven months later, the price of the stock is $49 and the risk-free interest rate changes to 5%. What are the forward price and the value of the forward contract?

Reference no: EM131566419

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