The current price of the underlying instrument is 1000 PLN. In a year (right after the expiry of the forward contract) this instrument will bring a dividend of PLN 70. In half a year the investor should bear the cost of storage of this instrument in the amount of PLN 50. If the current semi-annual interest rate is 4% (continuous interest rate) and the current annual interest rate is 5% (continuous interest rate), what should be the current forward price of this contract with time to maturity 1 year? O a. 1072.30 PLN O b. 1032.79 PLN O c. 1102.82 PLN O d. 1101.80 PLN
The current price of the underlying instrument is 1000 PLN. In a year (right after the expiry of the forward contract) this instrument will bring a dividend of PLN 70. In half a year the investor should bear the cost of storage of this instrument in the amount of PLN 50. If the current semi-annual interest rate is 4% (continuous interest rate) and the current annual interest rate is 5% (continuous interest rate), what should be the current forward price of this contract with time to maturity 1 year? O a. 1072.30 PLN O b. 1032.79 PLN O c. 1102.82 PLN O d. 1101.80 PLN
Financial Management: Theory & Practice
16th Edition
ISBN:9781337909730
Author:Brigham
Publisher:Brigham
Chapter4: Time Value Of Money
Section: Chapter Questions
Problem 8MC: Define the stated (quoted) or nominal rate INOM as well as the periodic rate IPER.
Will the future...
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