Question: A short forward contract on a commodity that was negotiated some time ago will expire in 4 months and has a delivery price of $41.

A short forward contract on a commodity that was negotiated some time ago will expire in 4 months and has a delivery price of $41. The current spot price of the commodity is $43. The risk-free interest rate (with continuous compounding) is 7.2%. What is the value of the short forward contract?

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