Question
The forward contract on the stock of ZYX Inc. is currently selling for $102 per share. The contract expires in six months. You go long
- The forward contract on the stock of ZYX Inc. is currently selling for $102 per share. The contract expires in six months. You go long in the contract. How will contract close and what will be your payoff under following situations:
- The price of underlying stock at expiration is $96. The contract is to be settled with physical delivery. (1 marks)
At the time of expiration, the price of underlying stock is $106. The contract is to be cash settled.
- The forward contract on the stock of ZYX Inc. is currently selling for $102 per share. The contract expires in six months. You go long in the contract. How will contract close and what will be your payoff under following situations:
- The price of underlying stock at expiration is $96. The contract is to be settled with physical delivery.
At the time of expiration, the price of underlying stock is $106. The contract is to be cash settled.
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Financial management theory and practice
Authors: Eugene F. Brigham and Michael C. Ehrhardt
13th edition
1439078106, 111197375X, 9781439078105, 9781111973759, 978-1439078099
