R
Richard_07
Member
Hi everyone,
I don't think I would ever come up with the solution to the question 6 from September 2005 exam under exam conditions on my own.
I'm just wondering if there is any alternative explanation? I was thinking of using the formula K=(S0-PVd)*e^(rt), where PVd is the present value of future dividends. The PV of dividends will be 0.03*e^(-0.07/12)+0.03e^(-0.07*7/12)+etc.
But my final answer for the fair forward price is different to $9.98 from the solutions...
Thanks
I don't think I would ever come up with the solution to the question 6 from September 2005 exam under exam conditions on my own.
I'm just wondering if there is any alternative explanation? I was thinking of using the formula K=(S0-PVd)*e^(rt), where PVd is the present value of future dividends. The PV of dividends will be 0.03*e^(-0.07/12)+0.03e^(-0.07*7/12)+etc.
But my final answer for the fair forward price is different to $9.98 from the solutions...
Thanks