Suppose you buy a one year forward contract at $65. At expiration, the spot price is $73

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Suppose you buy a one year forward contract at $65. At expiration, the spot price is $73 and the risk free rate is 10%. What is the value of the contract at expiration?
A) 8.00
B) - 8.00
C) 0
D) 7.27

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An Introduction to Derivative Securities Financial Markets and Risk Management

ISBN: 978-0393913071

1st edition

Authors: Robert A. Jarrow, Arkadev Chatterjee

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Question Posted: Feb 15, 2018 07:48 AM

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Suppose you buy a one year forward contract at $65. At expiration, the spot price is $73

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a 800 positive Since the questions concerns on value at expi...View the full answer

An Introduction to Derivative Securities Financial Markets and Risk Management

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