The price of a forward contract: A) changes over the term of the contract. B) is determined at contract initiation. C) depends on forward interest rates.
I’ll pick option B.
That is correct. I picked A because I thought that value of forward keeps changing. But true the price is fixed at initiation.
anupamjain008 Wrote: ------------------------------------------------------- > That is correct. I picked A because I thought that > value of forward keeps changing. But true the > price is fixed at initiation. I want to assume ‘‘value’’ as use meant ‘‘price’’. Be careful not to confuse price with value when dealing with derivative. Value is what you pay (or receive) to enter (or exit) the contract while price refer to the forward or future.