LR1909 Problem FORW-4B This is a continuation of Problem FORW-4A in the class notes. Today is time 0. The following securities are given: Security Delivery Price Maturity Current price Forward contract $25 Time T on XYZ stock D(0,1,25) Forward contract $15 Time T D(0,1,15) on XYZ stock A zero-coupon bond N/A Time T B(0,T) with $1 maturity value Questions (al) Complete the following table. Delivery Time-0 Position Time-0 Value (payoff) Security price unit price (Units) value at expiration Forward $15 D(0,1,15) Bond N/A B(0,T) Total value N/A N/A N/A ST - 25 In words: Use the 15-delivery-price forward contract and the bond in order to replicate the 25-delivery-price forward contract. We infer from this that the following relationship between the three prices should be satisfied. (Complete.) D(0,1,25) (1) (a2) (61) Complete the following table. Delivery Time-0 Position Time-0 Value (payoff) Security price unit price (Units) value at expiration Forward $15 D(0,1,15) Forward $25 D(0,1,25) Total value N/A N/A N/A 10 In words: Use the two forward contracts to replicate the payoff of 10 bonds. We infer from this that the following relationship between the three prices should be satisfied. (Complete.) 10. B(0,T) = (2) (62) LR1909 Problem FORW-4B This is a continuation of Problem FORW-4A in the class notes. Today is time 0. The following securities are given: Security Delivery Price Maturity Current price Forward contract $25 Time T on XYZ stock D(0,1,25) Forward contract $15 Time T D(0,1,15) on XYZ stock A zero-coupon bond N/A Time T B(0,T) with $1 maturity value Questions (al) Complete the following table. Delivery Time-0 Position Time-0 Value (payoff) Security price unit price (Units) value at expiration Forward $15 D(0,1,15) Bond N/A B(0,T) Total value N/A N/A N/A ST - 25 In words: Use the 15-delivery-price forward contract and the bond in order to replicate the 25-delivery-price forward contract. We infer from this that the following relationship between the three prices should be satisfied. (Complete.) D(0,1,25) (1) (a2) (61) Complete the following table. Delivery Time-0 Position Time-0 Value (payoff) Security price unit price (Units) value at expiration Forward $15 D(0,1,15) Forward $25 D(0,1,25) Total value N/A N/A N/A 10 In words: Use the two forward contracts to replicate the payoff of 10 bonds. We infer from this that the following relationship between the three prices should be satisfied. (Complete.) 10. B(0,T) = (2) (62)