Suppose stock A is priced at $30/share and the company will pay a dividend of $0.30/share after two months. An investor purchases 100 shares of A and invests all dividends received at a continuosuly compunded risk-free rate of 5%. After 3 months the stock is sold when the price is $35.40/share. Calculate the 3-month profit.

Suppose stock A is priced at $30/share and the company will pay a dividend of $0.30/share after two months. An investor purchases 100 shares of A and invests all dividends received at a continuosuly compunded risk-free rate of 5%. After 3 months the stock is sold when the price is $35.40/share. Calculate the 3-month profit.

Advanced Engineering Mathematics

10th Edition

ISBN:9780470458365

Author:Erwin Kreyszig

Publisher:Erwin Kreyszig

Chapter2: Second-order Linear Odes

Section: Chapter Questions

Problem 1RQ

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