Help on Forwards Pricing
Dear fellow WSOs,
I would appreciate some assistance.
I am stuck on a question in calculating the Forward Price at time T on a dividend paying index, I was given the following information:
annual return = 15% (continuously compounded from daily index returns)
dividend rate = constant
risk-free rate = 8%
Suppose the Stock Price at time 0 is 80. I want to apply the formula F = S*e^(8%-div)(T1-T0) but am stumped at the derivation of the dividend yield.
Is there a use for the annual return?
Thanks for your time