Forward Markets and Contracts by Edu Pristine

Author of lecture Forward Markets and Contracts

Edu Pristine

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... Institute does not endorse, promote, or warrant the accuracy or quality of the products or services offered by Pristine. CFA Institute, CFA ® , ...

... CFA Institute, CFA ®, and Chartered Financial Analyst ®; are trademarks owned by CFA Institute. The LOS are the sole property of the CFA Institute. "Contract whereby parties are committed to buy (sell) an underlying asset at some future date (maturity), at a delivery price (forward price), set in advance when contract is initiated: "No cash flow". The party ...

... price: $990/troy ounce. What would be the profit/loss at expiration for both the parties? Disclaimer: CFA Institute does not endorse, promote, or warrant the accuracy or quality of the products or services offered by Pristine. ...

... products or services offered by Pristine, CFA Institute, CFA ® , and Chartered Financial Analyst ®; are trademarks owned by CFA Institute. The LOS are the sole property of the ...

... Institute does not endorse, promote, or warrant the accuracy or quality of the products or services offered by ...

... endorse, promote, or warrant the accuracy or quality of the products or services offered by Pristine. CFA Institute, CFA ® , and Chartered Financial Analyst ...

... will fall, hence the long will make losses as a result of market rate increase. Disclaimer: CFA Institute does not endorse, promote, or ...

... CFA ® , and Chartered Financial Analyst ®; are trademarks owned by CFA Institute. The LOS are the sole property of the CFA Institute. "Obligation to deliver ...

... or warrant the accuracy or quality of the products or services offered by Pristine. ...

... CFA ®, and Chartered Financial Analyst ®; are trademarks owned by CFA Institute. The LOS are the sole property of the CFA Institute. "A portfolio manager desires to sell her portfolio worth $10 million, composition of which is very similar to S & P 500 index. He took a short position in a 100 day forward contract based on index ...

... so total amount is 3.7% * 10,000,000 = $370,442. Disclaimer: CFA Institute does not endorse, promote, or warrant the accuracy or ...

... Asset Delivery Cash Settlement Offsetting Disclaimer: CFA Institute does not endorse, promote, or warrant the accuracy or quality of the products ...

... Example: "The person who has an obligation to purchase the asset as per the contract (long position) to the person who has an obligation to sell the asset (short position) if the prevailing price is lower than the contracted price - Forward Price = $100 - Spot Price (at expiry) = $90 - Payoff for Long = -$10 (Loss) - Payoff for Short = $10 (Profit) - Long Pays $10 to short and settles the contract Disclaimer: CFA Institute ...

... Disclaimer: CFA Institute does not endorse, promote, or warrant t he accuracy or quality of the products or services offered by Pristine. CFA Institute, CFA®, and Chartered Financial Analyst ®; are trademarks owned by CFA Institute. The LOS are the sole property of the CFA Institute. "This can be done by entering into another contract which is opposite to the current contract. The time period of the new contract should be equal to the time left till expiration of the current contract Example: "A and B enter into a one month ...

... Disclaimer: CFA Institute does not endorse, promote, or warrant t he accuracy or quality of the products or services offered by Pristine. CFA Institute, CFA® , and Chartered Financial Analyst ® ; are trademarks owned by CFA Institute. The ...

... Enter into another short contract at the increased price. B. Terminate the contract and short another forward contract at the higher price for the remaining period. C. Terminate the contract and enter into a long forward at the higher price for the remaining period ...