why does forwards use the PV of the coupon while I see that futures use the FV of the coupons. Are’nt they both the same?
Yeah, I wondered the same. Seems kinda annoying that they use 2 different conventions for what is basically the same thing. I adopted one method and stuck with that and ignored the other.
They both come out to roughly the same answer.
it should be the exact same answer. If you PV cash flows from when they happen, or you FV them to maturity and then PV them back after it’s all the same.
Unless I’m missing something really fundamental.
^ You’re right. The answers will be the same, decimal for decimal.