Question
How does forward price differ from forward value?
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Answer
Price is the contractual delivery price; value is the contract's market worth.
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Question
What is the no-arbitrage forward price with no carry effects?
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Answer
F0(T)=S0(1+r)T
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Question
How does the no-arbitrage forward price change when the underlying provides known benefits before expiration?
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Answer
Subtract the present value of benefits from spot before carrying forward.
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Question
At what three time points should you know forward contract value behavior for exams?
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Answer
Initiation, during life, and expiration.
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