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Q7. Consider Exercise 6. Six months have now passed so that today is November 15, 2000. You want to calculate the payoff from being long
Q7. Consider Exercise 6. Six months have now passed so that today is November 15, 2000. You want to calculate the payoff from being long the forward contract. Using the data in Table 5.10 answer the following (a) What is the amount of the payoff if you are long the forward contract? (b) Do you make money or lose money? (c) Assume that 3 months have passed after the forward contract initiation day and today is August 15, 2000. What is the value of forward position on this day? Assume the discount curve on August 15, 2000 is the same as the discount curve on November 15, 2000 (Table 5.10). Q7. Consider Exercise 6. Six months have now passed so that today is November 15, 2000. You want to calculate the payoff from being long the forward contract. Using the data in Table 5.10 answer the following (a) What is the amount of the payoff if you are long the forward contract? (b) Do you make money or lose money? (c) Assume that 3 months have passed after the forward contract initiation day and today is August 15, 2000. What is the value of forward position on this day? Assume the discount curve on August 15, 2000 is the same as the discount curve on November 15, 2000 (Table 5.10)
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