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Suppose the effective annual interest rate is 10%. The S&R index is 1000 today and it does not pay dividends. Suppose you are offered a
Suppose the effective annual interest rate is 10%. The S&R index is 1000 today and it does not pay dividends. Suppose you are offered a long forward contract with 1 year to expire with forward price of $ 1300; how much would you need to be paid to enter into this forward contract? Suppose you are offered a long forward contract with 1 year to expire with forward price of $1000; how much would you be willing to pay to enter into this forward contract? Suppose you are offered a short forward at $I200 with 1 year to expire; should you pay or be paid to enter into this contract? How much would be the amount
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