Forward Pricing by Replication Depends on the Following Assumption

question 5

Multiple Choice

Forward pricing by replication depends on the following assumption:

• A) That the nominal interest rate for the cost of carry is positive.
• B) That long positions are easier to take in the forward contract than in the spot asset.
• C) That the underlying is a traded asset which is storable.
• D) That the spot asset is not a financial security.

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