Forward Price With Cost of Carry

A continuous dividend yield $q$ reduces the net cost of carry below the risk-free rate.

The forward price is $F=S_0{e}^{(r-q)T}$.

1. 1. Apply the cost-of-carry formula

   With continuous yield $q$, $F=S_0{e}^{(r-q)T}=100e^{(0.04-0.01)(1)}$.

   $$F=100e^{0.03}$$

2. 2. Evaluate

   Numerically, $F\approx 103.0455$.

Answer: 100e^0.03