Question: please do it correctly will upvote Problem 2 Explain the difference between the forward price and the value of a forward contract. Give an example

please do it correctly will upvote Problem 2 Explain the difference

please do it correctly will upvote

Problem 2 Explain the difference between the forward price and the value of a forward contract. Give an example when they are not the same. Are they ever the same? Discuss differences and similarities between forward and future contracts. As part of the discussion explain why the future price of an asset is lower than its forward price when the future price is strongly negatively correlated with the interest rate. Explain why the forward price (with stock as the underlying asset) satisfies the equation Ft= Ste(T-1)

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