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Question 2 (Mandatory) (10 points) The present value of a cashflow $18.20. The continuously compounded rate of interest is 12.28%. What is the future value
Question 2 (Mandatory) (10 points) The present value of a cashflow $18.20. The continuously compounded rate of interest is 12.28%. What is the future value of the cashflow in 14.75 years? Please input your answer to the closest cent (hence, your answer must include two digits past the decimal). Please do not use commas or dollar signs. Question 3 (Mandatory) (10 points) In which of the following ways are forward contracts and options identical? The value post-initiation is always an asset for the long position. The contract is a zero-sum game. The value at initiation is equal to zero. All of the above are ways in which forward contracts and options identical. Question 4 (Mandatory) (10 points) The forward price is determined at contract initiation but changes during the life of the forward contract. True False Question 5 (Mandatory) (10 points) An interest rate that is compounded an infinite number of times per year is referred to as a "continuously compounded" rate of interest. True False Question 6 (Mandatory) (10 points) True or false: You've entered into a long position in a forward contract. The forward contract has 1.25 years remaining until expiration. The continuously compounded risk free rate of interest is 3.5%. The forward price associated with the forward contract is $83.50. The market price of the underlying asset is $81.70. In this case, the forward contract is an asset. Question 7 (Mandatory) (10 points) Consider a forward contract with expiration in 1 year. The continuously compounded risk free rate of interest is 2.5%. The forward price is $45. By how much will the forward contract increase in value as the underlying asset's market price increases from $52 to $53? Please input your answer to the closest cent (hence, your answer must include two digits past the decimal). Please do not use commas or dollar signs
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