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Assumptions: Unlimited selling and short selling are allowed. Interest is compounded continuously. Consider a forward contract written at t = to, for delivery at t=T.

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Assumptions: Unlimited selling and short selling are allowed. Interest is compounded continuously. Consider a forward contract written at t = to, for delivery at t=T. (a) Graph the payoff at maturity for the holder of the short position in the forward. (b) Set up a portfolio at time t

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