Question 3 This question asks you to think about how the value of a forward contract changes over time. (a) On February 2!] you enter into forward contract to buy ABC shares on December 2!]. ABC shares currently trade at 31m and EC does not pay dividends. The continuously compounded interest rate is 4% and aaslnned to be constant for the whole calendar year. What is the forward price? {b} On May 2f], the price of one ABC share is $150. What is the forward price of a forward contract with delivery date December 2!} [this is a different contract]? {c} What is the 1u'alue of the original forward contract [that you entered into in February} on May 21]? {d} Sometimes it is the case that you would be prepared to actually pay someone eLse for the right to walk away from a forward contract. In this case the Tvalue of the forward contract is negative. Redo part [iii] lmder the assimiption that on May 2f]. the price of one ABC share is $59