Question: Consider a forward contract with strike K = 4 and expiration T = 3 on an underlaying S. Suppose that So = 5 and

Consider a forward contract with strike K = 4 and expiration T = 3 on an underlaying S. Suppose that So = 5 and r = 3 (a) What is the value of the forward contract at time zero, Fo? (b) What is the forward price, Ko? (c) What is the price of the forward contract if the strike price K is equal to Ko?

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