I need help on this Question for some reason im getting 10 % ...
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I need help on this Question for some reason im getting 10 %
A stock is selling for a price of $100 per share. A one-year maturity forward contract on one share of the stock has a forward price of $110. Suppose you buy one share of the stock and sell one one-year forward contract on the stock. What is the rate of return on your investment after one year? (Assume the stock does not pay dividends.) -100%. You lose everything. 5% -5% Need more information. It depends on the the dollar premium you paid to enter the forward contract, which was not provided in the
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I need help on this Question for some reason im getting 10 % 