The Value of a Long Position in a Forward Contract

question 5

Multiple Choice

The value of a long position in a forward contract at expiration is

• A)the spot price plus the original forward price
• B)the spot price minus the original forward price
• C)the original forward price discounted to expiration
• D)the spot price minus the original forward price discounted to expiration
• E)none of the above

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Definitions:

Superior

Higher in rank, quality, or importance; often used to describe someone or something that excels compared to others.

Declarative

Pertaining to a statement or expression that makes a statement or assertion, conveying information.

Conditional

Depending on specific conditions or stipulations to be met before something else can occur or be considered true.

Intimate

Characterized by a close personal association or familiarity, often relating to personal or private matters.