Stock A has a spot price of $50. It is expected to appreciate by 2% over the next quarter. The risk-free rate for the next quarter is 2% in continuously-compounded and annualized terms, and the quarterly continuous dividend payment is also 2% in continuously-compounded and annualized terms. The three-month forward price is
A) $50.00
B) $50.25
C) $50.50
D) $50.75
Correct Answer:
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