# Calculation Of Forward Price Of Dividend Security

Question

For the following questions assume the risk free rate of return is 2.50%. Your company imports large quantities of oil. On January 1st 2011 the spot price of oil is \$70. You are concerned that recent events will drive the price of oil higher in 90 days time when you will need to purchase a large quantity. Under these circumstances calculate the price of a forward contract. In 90 days time the spot price of oil is \$125; calculate the profit or loss of your forward position. What is the 10 month forward price of a dividend security based on the following information:

 Current price \$110.00 Quarterly dividend \$1.00 Dividend payment dates: 3M, 6M, 9M

Summary

The question belongs to Finance and it discusses about calculation of forward price of a dividend security. The calculation has been given in the solution.

Total Word Count 24

### Comments

• Rasha

this is a very good website

• maani

I have 50 questions for the same test your page is showing only 28

• joeanne

hi can you please help or guide me to answer my assignments. thanks

• joeanne

hi can anyone help or guide me to my assignments. thanks

• Monik

• Cristina

This solution is perfect ...thanks

• Janete

Hello Allison,I love the 2nd image that you did! I also, had never heard of SumoPaint, is something that I will have to exolpre a bit! I understand completely the 52 (or so) youtube videos that you probably watched. Sometimes they have what you want, sometimes they don't! However, it is always satisfying when you are able to produce something that you have taught yourself. Great job!Debra 0 likes

• Sandeep

Perfect bank of solution.

• Oxana

great !

• Paul Brandon-Fritzius

thanks for the quick response. the solution looks good. :)

• tina Johnson

thnx for the answer. it was perfect. just the way i wanted it.

• Giuseppe

works fine.