Question
Value of a Forward contract at an intermediate time Suppose we hold a forward contract on a stock with expiration 6 months from now. We
Value of a Forward contract at an intermediate time
Suppose we hold a forward contract on a stock with expiration 6
months from now. We entered into this contract 6 months ago so that when we entered into the contract, the expiration was T=1 year. The stock price$ 6 months ago was S0=100, the
current stock price is 125 and the current interest rate is r=10%
compounded semi-annually. (This is the same rate that prevailed 6 months ago.) What is the current value of our forward contract?
Please submit your answer in dollars rounded to one decimal place so if your answer is 42.678 then you should submit an answer of 42.7.
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