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1. A stock is going to pay a dividend of $1 per share in 3 months. The current stock price is $40, and the interest rate is 5% per year with continuous compounding. What should be the price of a 5-month forward contract on the stock?
A.$39.82
B.$39.83
C.$39.84
D.$40.00
E.$40.84
2. The current value of the S&P500 index is 2300. The interest rate is 1% per year with continuous compounding, and the dividend yield on the index is 3% per year. What should be the 6-month futures price?
A.2254.46
B.2277.11
C.2311.53
D.2323.12
E.2346.46
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