List three of the main features of a forward contract:

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Critically discuss the main features of Eurocredits and Forward Rate Agreements

Forward Contract

A long forward contract that was negotiated some time ago will expire in three months and has a delivery price of $20. The current forward price for a three-month forward contract is $21. The three-month risk-free interest rate is 8%. What to the nearest cent is the value of the short forward contract? A) -$1.85 B) $2.00 C) -$0.98 D) $0.98

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Differentiate between a spot contract and a forward contract.

A forward contract on a non-dividend paying stock trades at 1,200. This forward contract matures 1...

A forward contract on a non-dividend paying stock trades at 1,200. This forward contract matures 1 month from now. A second forward contract on the same stock trades at 1,220 and expires 3 months from now. Suppose perfect market and a continuously compounding interest rate which will remain same over the next 6 months. 1. What is the spot price of the underlying asset today? 2. Now, suppose there is a third forward contract, expiring in 4 months and trading...

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List three of the main features of a forward contract:

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