3) Three months later, the price of the stock becomes $99 per share and the risk-free rate is 10% per annum withcontinuous compounding. What is the forward price now for a contract on the same stock with the same delivery dateas the one that the trader has entered into?Answer: 104.0754) Three months after the trader enters into the original forward contract, what is the value of the original contract tothe trader now? (Based on the same information as in part 3), i.e., the stock price is now $99 and the risk-free rate is10%).Answer: -37.1801

Note: Since you have posted multiple questions we will solve the first question for you. If you want…

Answered: 3) Three months later, the price of the…

Algebra and Trigonometry (6th Edition)

6th Edition

ISBN:9780134463216

Author:Robert F. Blitzer

Publisher:Robert F. Blitzer

ChapterP: Prerequisites: Fundamental Concepts Of Algebra

Section: Chapter Questions

Problem 1MCCP: In Exercises 1-25, simplify the given expression or perform the indicated operation (and simplify,...

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3) Three months later, the price of the stock becomes $99 per share and the risk-free rate is 10% per annum with continuous compounding. What is the forward price now for a contract on the same stock with the same delivery date as the one that the trader has entered into?