Suppose the September forward price is $50/share: a. Draw the payoff profile of a short forward contract.
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Suppose the September forward price is $50/share:
a. Draw the payoff profile of a short forward contract. How much would you earn or lose if the market price at maturity was $68/share? How much would you earn or lose if the market price, at maturity, was $48/share? LO6
b. Draw the payoff profile of a long forward contract. How much would you earn or lose if the spot price at maturity was $68/share? How much would you earn or lose if the spot price, at maturity, was $48/share?
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