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CFA Level 2
Derivatives

Calculating Forward Price for Equity Forwards

Very Hard Forward Pricing And Valuation Equity Forwards

ABC Corp is currently trading at $100 per share. The company pays no dividends, and the risk-free interest rate is 5% per annum. A trader wants to enter into a 6-month forward contract to buy 100 shares of ABC Corp. The trader will need to calculate the forward price to determine the appropriate premium for the forward contract specified in the agreement.

What is the value of the forward price in this scenario?

Hint

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