In-class_Exercise_5

In-class_Exercise_5 - I n-cl ass Exer ci se 5 • What i s...

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Unformatted text preview: I n-cl ass Exer ci se 5 • What i s the r el ati on between for war d and spot pr i ces? • What pr i nci pl e do we need when we der i ve t he for war d pr i ce for mul a? • What other assumpti ons do we need i n the pr ocess of der i vi ng the for mul a? • What can we say about the for war d pr i ce i f t hese assumpti ons do not hol d? • What i s di ffer ence between for war d and futur es contr acts? • What i s the di ffer ence between f or war d pr i ce and futur es pr i ce? • What do you need to do i f you woul d l i ke to take a l ong posi ti on on a f utur es contr act? • What does the mar k-to-mar ket mean? • At ti me t=0, you enter i nto a l ong posi ti on on a for war d contr act wi th d el i ver y pr i ce K . At l ater ti me t, the spot pr i ce was S,t what was the val ue of the for war d contr act to you at ti me t? ...
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In-class_Exercise_5 - I n-cl ass Exer ci se 5 • What i s...

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