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Business, 27.10.2020 22:40 wilneishawatkins

Stock “ABC” is expected to pay a dividend of $1.5 per share in 1 month and a dividend of $2.5 per share in 3 months. The current price of stock “ABC” is $27.0 per share, and the risk-free rate of interest is 6% per annum with continuous compounding. Calculate the fair price of a 2-year forward contract on stock “ABC”.

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