What is the value of the forward contract

Assignment Help Finance Basics

Reference no: EM13273583

A 2-year long forward contract on a non-dividend-paying stock is entered into when the stock price is $138 and the risk-free interest rate is 9.3% per annum with continuous compounding. 1 year later, the price of the stock is $146 and the risk-free rate is 9%. What is the value of the forward contract?

Reference no: EM13273583

Questions Cloud

Define what is the molecular formula for a substance : What is the molecular formula for a substance that contains in 1.00 mole of sample 1.00 mole of S, 24.1 x 10 to the 23rd atoms of F, and 71.0 grams of Cl

What is the continuous compounding forward rate : The 6-month, 12-month, 18-month, and 24-month zero rates are 3%, 4%, 5%, and 6% with semiannual compounding. What is the continuous compounding forward rate for the six-month period beginning in 12 months?

Find the speeders speed with respect to the ground : A speeder is pulling directly away and increasing his distance from a police car that is moving at 27 m/s with respect to the ground. Find the speeder's speed with respect to the ground

What is dependent voltage-controlled voltage-source : (a) What is voltage source and its terminal (voltage/current) behavior (b) What is current source and its terminal (voltage/current) behavior (c) What is dependent voltage-controlled voltage-source

What is the value of the forward contract : A 2-year long forward contract on a non-dividend-paying stock is entered into when the stock price is $138 and the risk-free interest rate is 9.3% per annum with continuous compounding. 1 year later, the price of the stock is $146 and the risk-fre..

Explain chromatographic analysis : A solution containing 3.45 mM of p-xylene (analyte) and 6.86 mM of nonane (standard) gave peak areas of 13587 and 14769 respectively, in a chromatographic analysis. then 1.5 mL of 6.86mM nonane solution was added to 5 mL of an unknown sample conta..

What is the amplitude of the current : A charged capacitor is connected to an ideal inductor. At time t = 0, the charge on the capacitor is equal to 6.00 ÂµC. What is the amplitude of the current at that same instant

Calculate the option profit to the trader : At the expiration, the stock price becomes $18.99. Calculate the option profit to the trader.

What is the value of an fra : The 12-month, 15-month, 18-month zero rates are 4.5%, 4.6%, 4.7% with continuous compounding. What is the value of an FRA that enables the holder to earn 6.1% (with semiannual compounding) for a 3-month period starting in 1 year on a principal of ..

User Account

All Pages