You enter a forward contract for free at t=0 when the stock price is $80. The maturity time of the contract is T = 1 and interest rate is 4% continuously compounded. At t=1/2, stock price becomes $90 and you decide to sell the forward contract. Use cash-and-carry to compute how much you should charge for selling the contract? What is stock price becomes $70 at t = 1/2?

Q1 You enter a forward contract for free at t=0 when the stock price is $80. The maturity time of the contract is T = 1 and interest rate is 4% continuously compounded. At t= 1, stock price becomes $90 and you decide to sell the forward contract. Use cash-and-carry to compute how much you should charge for selling the contract? What if stock price becomes $70 at t = ? Q1 You enter a forward contract for free at t=0 when the stock price is $80. The maturity time of the contract is T = 1 and interest rate is 4% continuously compounded. At t= 1, stock price becomes $90 and you decide to sell the forward contract. Use cash-and-carry to compute how much you should charge for selling the contract? What if stock price becomes $70 at t =