Given that a stock is currently worth $£25$, and the forward contract delivers in $1$ year, the interest rate is $0.025$ for the first $6$ months and $0.04$ afterwards, then what is the delivery price?
I thought the answer would be $25e^{([0.025)(0.5)]}= 25.3$so this is the forward price if it was terminated here. Then for the last $6$ months $25.3e^{[(0.04)(0.5)]}.$
But apprently this method is incorrect?