equity forward contracts-continous dividends-stupid question
it might be a stupid question, but i really do not understand why when we want to calculate a price of a forward on an equity index we do
e^(Rf - cont. compounded dividend yield)*T
Why is it Rf MINUS the cont. compounded dividend yield. why minus??
Or when calculatin the value of the forward contract we have:
S/ (e^cont.comp. dividend*(T-t) - FP/(e^Rf*(T-t).
Hope you understand the question.
It just confuses me why especially when calculatin the price its Rf - cont.comp. div.) |
发表于 2013-4-8 14:01
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