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Sagot :
Answer:
$3.04
Explanation:
F = (K - F0)*e^(-r*T) Where f = current value of forward contract, F0 = forward price agreed upon today, K = delivery price for a contract negotiated, r = risk-free interest rate applicable to the life of forward contract, T = delivery date
F = ($49.25-$46.00)*e^(-0.0665*12/12)
F = $3.25*e^(-0.0665)
F = $3.25*0.935662916
F = $3.040904477
F = $3.04
So, the value of the short forward contract is $3.04.
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