A stock price is $85.00.Assume r = 0.07 and there is no dividend.What is the 6-month forward price?
A) $88.03
B) $89.16
C) $90.26
D) $92.33

Name: A stock price is $85.00.Assume r = 0.07 and there is no dividend.What is the 6-month forward price? A) $88.03 B) $89.16 C) $90.26 D) $92.33
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The forward price is calculated using the formula: Forward Price = Spot Price * e^(r*t). Here, Spot Price = $85, r = 0.07, t = 0.5 years. Plugging in the values, Forward Price = 85 * e^(0.07*0.5) = $88.03.

A Stock Price Is $85