Question
1) Suppose the spot price today for an asset is $10 and the continuously compounded risk-free rate is 9% The 1-year forward price today is
1) Suppose the spot price today for an asset is $10 and the continuously compounded risk-free rate is 9%
The 1-year forward price today is therefore F=10*exp(0.09) = 10.9417
a) What is the value of the forward contract after 6-months if the spot price is now $12?
b) What is your profit or loss if you sell the contract after 6-months?
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Mergers And Acquisitions Integration Handbook
Authors: Scott C. Whitaker
1st Edition
111800437X, 978-1118004371
