AppliedNumeric answer
A stock trades at and will pay a dividend in three months. The continuously compounded rate is . What is the one-year forward price, to two decimals?
Answer with a number. Fractions, powers and expressions like 23/6 or C(52,5) are read correctly in practice.
The worked solution is in Premium
The answer, the full working and the one idea to take away – for this and all 1,322 questions in the bank. Answer it in practice and your working is marked, with a known mistake named when you make one.
Learn the method
Reported in interviews at
More time value, rates and linear products questions
- What happens to the basis – spot minus futures – as a futures contract approaches expiry?Foundation
- Futures are not forwards, part 1 of 3Foundation
- A forward on a stock that pays a dividend, part 1 of 3Foundation
- An index is at 4,000, rates are 5% and the dividend yield is 2%, both…Applied
- A commodity futures curve slopes upward.Applied
- A stock is at $100 and pays a $3 dividend in six months.Applied