A Trader Can Borrow Money at 6 Percent and Lend

Multiple Choice

A trader can borrow money at 6 percent and lend money at 5 percent,where the interest rates are continuously compounded annual rates.A brokerage commission of 0.5 percent of the stock price is charged today but the broker waives transactions costs on the maturity date.If BUG's stock price S is $50 today,then the seven-month forward price on BUG's stock should lie between:

A) $51.22 and $52.04
B) $51.47 and $51.78
C) $51.22 and $52.54
D) $51.22 and $51.47
E) None of these answers are correct.