Bharti Singla
Senior Member
Hello everyone
Please anyone help me with this qus. attached below. It's a new case I have seen here which I can't see in the chapter. There we are taught to calculate the value of forward contract at some *intermediate* time r. And at page16 of ch13, it is written that at time 0, the value of contract for buyer and seller is zero and at maturity date , it is ±(Ko-St).
But I didn't get this qus. At what time they are asking to find the value of contract? And how to calculate that? They are considering the present value of delivery price and subtracting it from PV of forward price, why PV? It would mean that it is the value of contract at start but it should be 0 isnt?
Please anyone clarify asap.
Thankyou
Please anyone help me with this qus. attached below. It's a new case I have seen here which I can't see in the chapter. There we are taught to calculate the value of forward contract at some *intermediate* time r. And at page16 of ch13, it is written that at time 0, the value of contract for buyer and seller is zero and at maturity date , it is ±(Ko-St).
But I didn't get this qus. At what time they are asking to find the value of contract? And how to calculate that? They are considering the present value of delivery price and subtracting it from PV of forward price, why PV? It would mean that it is the value of contract at start but it should be 0 isnt?
Please anyone clarify asap.
Thankyou