The current price of GAP Inc. (GPS) stock is $8.50. You have $1,000 to invest and are able to borrow $1,000 at a 6% rate of interest with excellent credit. Based on the information above, what must the price of a 1-yr forward on GAP Inc.'s (GPS) stock be so that 'No Arbitrage' holds? a. $8.01 b. $8.50 c. $9.01 d. $9.51 e. None of the above.

Q&A Education