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( b ) The initial value ( not the price ) of this forward contract is zero by design; otherwise there will be arbitrage opportunities
b The initial value not the price of this forward contract is zero by design; otherwise there will be arbitrage opportunities for you and other traders. After three months, the price of the stock went down to $ per share. The riskfree rate of interest is still per annum. What is the forward price? And what is the value of the short position in the forward contract?
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