[Solved] How to get 1.96? What if Forward Price De

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How to get 1.96? What if Forward Price Deviates from S0(1+rT)T ? Assume the following data: T=1 year, F0,1=$104,S0=$100, and r1=2%. Forward price should be

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What if Forward Price Deviates from S0(1+rT)T ? Assume the following data: T=1 year, F0,1=$104,S0=$100, and r1=2%. Forward price should be F0,1=$100(1+0.02)=$102. Suppose that actual forward price is $104. Riskless arbitrage

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