Question: a) A forward contract which expires in 1 year has forward price 120 and the current spot price is 100. Assuming its value is 0

a) A forward contract which expires in 1 year has forward price 120 and the current spot price is 100. Assuming its value is 0 what is the cost of carry? b) In three months time the fair forward price is 140 what is the forward established in part a) worth?

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