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Stock ABC is a non-dividend paying stock with current price of $70. The risk-free rate is 5% per annum. Calculate price of a six-month forward contract.CorrectIncorrect
A coupon paying bond priced at $500 that pays a 6% coupon semi-annually. Assuming risk-free rate of 5%, calculate the price of 6-month forward contract. Coupon will be paid in 6 months.CorrectIncorrect
Stock ABC is a non-dividend paying stock with current price of $100. The continuously compounded risk-free rate is 6% per annum. Calculate price of 1-year forward contractCorrectIncorrect
A $1000 priced bond pays $50 coupon in 2 months and 5 months. Assuming continuously compounded risk-free rate, is 8% per year, calculate price of a 6-month forward contract?CorrectIncorrect
Stock XYZ has a dividend yield of 3% and is currently trading at $500. Assuming risk-free rate is 5%, calculate the price of a 4-month forward contract?CorrectIncorrect
In the above example, assuming continuously compounded yield and risk-free rate, calculate the price for a 6-month forward contract?CorrectIncorrect
Value of a forward contract at initiation is:CorrectIncorrect
Stock ABC is trading at $1300. A 6-month forward contract on stock ABC is trading $1400. Assuming continuously compounded risk-free rate, be 6% per annum, calculate the value of forward contract?CorrectIncorrect
In the above example, if we say that stock has a continuous dividend yield of 8%, what is value of forward contract now?CorrectIncorrect
Using the Q8, calculate value of forward contract if stock now rises to 1500.CorrectIncorrect
Read the following statements and choose the correct option:
Statement 1: If interest rate declines, forwards have slightly higher price than futures.
Statement 2: Futures and forwards can have a range of delivery dates.CorrectIncorrect
Index arbitrage can be performed by trading a subset of stocks representing index?CorrectIncorrect