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Basic Question 3 of 3
Subsequent to the initiation date, ______
B. the price of the forward contract can fluctuate.
C. both the value and the price of the forward contract can fluctuate.
A. the value of the forward contract can fluctuate.
B. the price of the forward contract can fluctuate.
C. both the value and the price of the forward contract can fluctuate.
User Contributed Comments 5
| User | Comment |
|---|---|
| aparmar | explain? |
| sahilb7 | The price of a forward contract is always fixed (i.e. forward price). However, once the contract starts the spot price may vary on the basis of various factors. This may lead to a change in the value of the contract. |
| alex2001 | Thanks Sahilb7, very helping. |
| khalifa92 | value is the gain and losses |
| khalifa92 | S0 is price time 0 - PV discounted cash flows = Value |
I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
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Learning Outcome Statements
describe the carry forward model without underlying cashflows and with underlying cashflows;
CFA® 2025 Level II Curriculum, Volume 5, Module 31.