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Suppose you bought a forward contract on January 1 that matures six months later. The forward...

Suppose you bought a forward contract on January 1 that matures six months later. The forward price was $220 at the time of purchase, and the continuously compounded interest rate was 8% per year. Three months have passed, and the spot price is now $150.

What is the value of your forward contract today?

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Answer #1

value of your forward contract today = 150 - 220*e-0.08*3/12

value of your forward contract today = -65.64

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