Question: 3. (a) Explain the similarities and differences between being the short party of a forward contract and being the holder of an American put option

3. (a) Explain the similarities and differences between being the short

3. (a) Explain the similarities and differences between being the short party of a forward contract and being the holder of an American put option contract. [6 marks] Suppose St is the price of a company's share at time t. Let at time t, Ct be the price of a European call option contract and pt be the price of a European put option contract on the share with the same strike price K and maturity date T. The continuously compounded constant risk-free rate of interest is r per annum. Consider two times u and v such that t

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