0 Abhishek ChaudharyPro Asked: November 29, 20212021-11-29T23:00:15+05:30 2021-11-29T23:00:15+05:30In: Derivatives (CFA L2) Forward pricing on dividend paying stocks 0 sir has told in class to calculate forward pricing using CF mode(HOW) if the contract is of 200 days and S0=840 stock is paying dividend in 60 days 120 days and 180 days and 360days (15, 20, 30 , and 40) how>?? Share Sorry, you do not have permission to answer to this question. 4 Answers Oldest QForum Expert #26 Audio Response | SS 2021-11-30T11:59:51+05:30Added an answer on November 30, 2021 at 11:59 am Please listen audio for your query. Abhishek Chaudhary Pro 2021-11-30T13:23:18+05:30Added an answer on November 30, 2021 at 1:23 pm This answer was edited. sir this is the question i have done it by TVM method BUT how can we do it through CF method Vidya Khanna The Official Nerd 2021-12-01T19:39:27+05:30Added an answer on December 1, 2021 at 7:39 pm There is gap of 60 days, first calculate the 60 days rate 100+- PV, 104 FV, 365/60 N, CPT I/Y => 0.6468 STO1 now use CF mode, CF1 = 15, CF2 = 20, CF3 = 30, I = RCL1, NPV = 64.07 Dividend of 40 will not be considered as it is already incorporated in forward price Hope this helps! Abhishek Chaudhary Pro 2021-12-09T19:37:18+05:30Replied to answer on December 9, 2021 at 7:37 pm thanks i got it
Please listen audio for your query.
sir this is the question i have done it by TVM method BUT how can we do it through CF method
There is gap of 60 days, first calculate the 60 days rate
100+- PV, 104 FV, 365/60 N, CPT I/Y => 0.6468 STO1
now use CF mode, CF1 = 15, CF2 = 20, CF3 = 30, I = RCL1, NPV = 64.07
Dividend of 40 will not be considered as it is already incorporated in forward price
Hope this helps!
thanks i got it