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Which of the following statements is true ahout the fonward prio

Which of the following statements is true ahout the fonward prio

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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3. Consider the forward contracts on two assets- stock_low_vol that has low volatility and stock_high_vol that has high volatility. The delivery date is same for both contracts. Assume no dividends and no storage costs for both assets. Suppose the current share price of both assets is the same. Which of the following statements is true about the forward prices? Select one: a. Forward price for stock_low_vol = Forward price for stock_high_vol b. Forward price for stock_low_vol < Forward price for stock_high_vol c. We need to know the beta of the stocks to answer this question d. Forward price for stock_low_vol > Forward price for stock_high_vol
Transcribed Image Text:3. Consider the forward contracts on two assets- stock_low_vol that has low volatility and stock_high_vol that has high volatility. The delivery date is same for both contracts. Assume no dividends and no storage costs for both assets. Suppose the current share price of both assets is the same. Which of the following statements is true about the forward prices? Select one: a. Forward price for stock_low_vol = Forward price for stock_high_vol b. Forward price for stock_low_vol < Forward price for stock_high_vol c. We need to know the beta of the stocks to answer this question d. Forward price for stock_low_vol > Forward price for stock_high_vol
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