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What is the value of the contract

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Question - Three months ago, an investor entered into a six-month forward contract to sell a stock. The delivery price on the contract is $53 per share. The current price of the share is $61. The interest-rate curve is flat at 5%.

a) What is the value of the contract if you don't expect any dividends?

b) If the stock is expected to pay a dividend of $2 per share in 1 month, what is the value of the contract?

Reference no: EM132833216

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