Stock a Has a Spot Price of $50

question 11

Multiple Choice

Stock A has a spot price of $50. It is expected to appreciate by 2% over the next quarter. The risk-free rate for the next quarter is 2% in continuously-compounded and annualized terms, and the quarterly continuous dividend payment is also 2% in continuously-compounded and annualized terms. The three-month forward price is

• A) $50.00
• B) $50.25
• C) $50.50
• D) $50.75

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Definitions:

B2C

Business-to-Consumer, a business model focused on selling products and services directly to the individual customer.

Buying Processes

The series of steps consumers follow from recognizing a need, evaluating options, making a purchase decision, to post-purchase evaluation.

New Buy

A buying situation in which a customer purchases a product or service for the first time, necessitating a decision-making process.

Buying Process

The series of steps a consumer goes through when deciding to purchase a product or service, from problem recognition to post-purchase behavior.