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The spot price of an investment asset that provides no income is $39.90 and the risk-free rate for all maturities (with continuous compounding) is 9.50%. What is the 3-year forward price? Answer with two decimal digits accuracy. Example: 52.12

Respuesta :

Answer:

Forward price = $53.05

Explanation:

Below is the calculation for forward price:

Given the spot price S = $39.90

Risk-free rate r = 9.50%

Time, t = 3 years

Forward price = S x e^rt

Forward price = 39.90 x e^(9.50% x 3)

Forward price = $53.05

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