Question
An investor buys the forward contract at the price from question 1 ; s/he is long the futures contract. In a year , the spot
An investor buys the forward contract at the price from question 1 ; s/he is long the futures contract. In a year , the spot stock price is $90 per share.
What is the payoff from financially settling the long future position? $__________
In a year , the spot stock price is $95 per share. What is the payoff from financia lly settling the long future position? $__________
In a year , the spot stock price is $100 per share. What is the payoff from financially settling the long future position? $__________
In a year , the spot stock price is $105 per share. What is the payoff from financially settling the long future position? $__________
In a year , the spot stock price is $110 per share. What is the payoff from financially settling the long future position? $___________
Dont know where to start with this problem.
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