Forward Pricing of Equity Forwards

Consider an investor named Alice who is looking to enter a forward contract to purchase 100 shares of ABC Corporation, which is currently trading at $50 per share. The forward contract duration is one year, and the risk-free interest rate is 5% annually. To simplify, we assume there are no dividends paid during the holding period.

The fair price of the forward contract, which represents the price at which Alice can buy the shares at the end of the contract, can be calculated using the formula:

Forward Price = Spot Price x e^(rT)

Where:

• Spot Price = Current price of the asset
• r = Risk-free interest rate
• T = Time in years

Based on the information provided, what would be the fair price of the forward contract?