What is the value of the short position in forward contract

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Reference no: EM131844094

A stock is expected to pay a dividend of $1.50 per share in one months and in 4 months. The stock price is $50, and the risk-free rate of interest is 7% per annum with continuous compounding for all maturities. An investor has just taken a long position in a six-month forward contract on the stock. Three months later, the price of the stock is $45 and the risk-free rate of interest is still 7% per annum. What is the value of the short position in the forward contract?

Reference no: EM131844094

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