Q2 A short forward contract that was negotiated some time ago will expire in four months and has a delivery price of 30. The current forward price for this four-month forward contract is 34. The risk-free interest rate is 7% per annum. (a) What is the current value of the short forward contract? [5] (b) Two months later, the price of the stock has increased to 50 and the risk-free interest rate is still 7%. What is now the value of the short forward contract? What is the price of a contract entered into at this time with the same expiration date as the above short forward contract? [7]