What is the price of this forward contract

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(A) A one-year long forward contract on a non-dividend-paying stock is entered into when the stock price is $60 and the risk-free rate of interest is 8% per annum with continuous compounding. What is the forward price of the forward contract?

(B) In February you short selling 100 shares for $110 per share and close out the short position three months later when the price is $100 to replace the browed shares. During the three months a dividend of $2 per share is paid. What would be your loss/profit if you had bought these 100 shares?

(C) Consider a one-year futures contract on gold. We assume no income and that it costs $2 per ounce per year to store gold, with the payment being made at the end of the year. The spot price is $1,600 and the risk-free rate is 5% per annum for all maturities. What is the price of this forward contract?

Reference no: EM133014548

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