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CFA Level 2
Derivatives

Forward Price Calculation for Equity Forwards

Medium Forward Pricing And Valuation Equity Forwards

John is considering entering into a forward contract to purchase 100 shares of XYZ Corporation, which is currently trading at $50 per share. The risk-free interest rate is 5% per annum, and dividends paid by XYZ Corporation are expected to be $2 per share over the next year.

What should be the forward price for the contract for delivery in one year?

Hint

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