Question: 1. What are the main differences between a forward contract and a future contract? 2. A bank quotes you an interest rate of 14% per

1. What are the main differences between a forward contract and a future contract? 2. A bank quotes you an interest rate of 14% per annum with quarterly compounding. What is the equivalent rate with continuous compounding? Answer: 7.921 % 3. You invest $200 at 8% interest rate with continuous compounding. What is the value o your investment you close your position 4 months later? Answer: $205.41

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