Q1
A short forward contract on a commodity that was negotiated some time ago will expire in 8 months and has a delivery price of $44. The current spot price of the commodity is $52. The risk-free interest rate (with continuous compounding) is 0.06. What is the value of the short forward contract?
Q2
Alrajhi Bank plans to pay a dividend of 3 per share both 3 and 5 from today. Alrajhi share price today is 78 SAR and the continuously
Q3
An investor shorts 122 shares when the share price is $94 and closes out the position 4 months later when the share price is $98. The shares pay a dividend of $6 per share during the 4 months. How much does the investor gain or lose?
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