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A forward on a stock that pays a dividend · Part 3 of 3
A stock trades at $50. The riskless rate is 4% a year, continuously compounded, and you are pricing a one-year forward contract on one share.
With the dividend, a dealer quotes the one-year forward at $52.00. What riskless profit per share, received at the one-year date, does the cash-and-carry trade lock in?
Answer with a number. Fractions, powers and expressions like 23/6 or C(52,5) are read correctly in practice.
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