why this is the case, see Rational pricing below.

For an asset that pays known income, the relationship becomes:

* Discrete:
* Continuous:

where the present value of the discrete income at time , and is the continuously compounded dividend yield over the life of the contract. The intuition is that when an asset pays income, there is a benefit to holding the asset rather than the forward because you get to receive this income. Hence the income ( or ) must be subtracted

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