A forward contract price will increase if: A. Future spot rates evolve as predicted by current forward

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A forward contract price will increase if:

A. Future spot rates evolve as predicted by current forward rates.

B. Future spot rates are lower than what is predicted by current forward rates.

C. Future spot rates are higher than what is predicted by current forward rates.

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Fixed Income Analysis

ISBN: 9781119850540

5th Edition

Authors: Barbara S. Petitt

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Question Posted: Nov 05, 2023 12:46 AM

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A forward contract price will increase if: A. Future spot rates evolve as predicted by current forward

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B is correct The forward rate model can be used to show that a change in the forw...View the full answer

Fixed Income Analysis

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