An investor shorts 100 shares when the share price is $50 and closes out the position six months later when the share price is $43. The shares pay a dividend of $3 per share during the six months. What is the investor's profit or loss? a. $400 loss b. $700 gain c. $300 loss d. $400 gain e. $700 loss An exchange rate is 0.700 and the six-month domestic and foreign risk-free interest rates are 5% and 7% (both expressed with continuous compounding). What is the six-month forward rate? a. 0.6738 b. 0.7120 c. 0.6800 d. 0.7030 e. 0.6930
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