The Spot Price of an Investment Asset Is $30 and the Risk-Free

question 3

Multiple Choice

The spot price of an investment asset is $30 and the risk-free rate for all maturities is 10% with continuous compounding.The asset provides an income of $2 at the end of the first year and at the end of the second year.What is the three-year forward price?

• A) $19.67
• B) $35.84
• C) $45.15
• D) $40.50

---

Definitions:

Typefaces

Designs of text characters, including aspects like size, weight, and style, used in printing and digital displays.

Predefined Shapes

Graphic elements provided within software applications that can be quickly inserted and customized in documents or designs.

Visual Interest

The aspect of a design that makes it appealing to look at by incorporating elements like color, shape, and texture to attract attention.

Slide

An individual page within a presentation program that can contain text, images, and other media used to convey information.