Question: A forward contract is sold at t = 0 with a forward price F0 = $135. Suppose the spot price (S0) at t = 0
A forward contract is sold at t = 0 with a forward price F0 = $135. Suppose the spot price (S0) at t = 0 is $115, and the settlement (expiration) day spot price is ST = $125. What is the value of the contract to the buyer of this forward?
| $20 | ||
| $10 | ||
| $0 | ||
| $10 | ||
| $20 |
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
