Question: A long forward contract on a commodity that was negotiated some time ago will expire in 4 months and has a delivery price of $73.

A long forward contract on a commodity that was negotiated some time ago will expire in 4 months and has a delivery price of $73. The current spot price of the commodity is $51. The risk-free interest rate (with continuous compounding) is 2.3%. What is the value of the long forward contract?

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