Question $6$: The Value of A Forward ContractThis question asks you tothink about how the value of a forward contract on a non$-$dividend paying stock changes over time.$(1)$ On February $20$ you enter into forward contract to buy ABC shares on December $20.$ABC shares currently trade at $$100.$ What is the forward price? $($The continuously compounded interest rate is $10\%$ and assumed to be constant for the whole calendar year.$)(2)$ On May $20,$ the price of one ABC share is $$150.$ What is the forward price of a forwardcontract with delivery date December $20($this is a different contract$)?(3)$ Forward contracts are not traded on an exchange, they do not have a market price.However, a reasonable way to define the value of a forward contract is as the amount ofmoney someone would have to pay you today to give up your forward contract.Usingthis definition, what is the value of the original forward contract $($that you entered into in February$)$ on May $20?(4)$ Sometimes it is the case that you would be prepared to actually pay someone else forthe right to walk away from a forward contract. In this case, the value of the forwardcontract is negative. Re$-$do part $($ii$)$ under the assumption that on May $20,$ the price of one ABC share is $$50.(5)$ What is the May $20$ value of a short position in the original forward contract if the ABC share price on May $20$ is $$150?(6)$ What is the May $20$ value of a short position in the original forward contract if the ABC share price on May $20$ is S$50?(7)$ What is the value of a long position in the original forward contract on February $20($the entry date$)?$