# Reading 38- Commodity Forwards & Futures

Um, the EOC in the text is a disaster. How are the schweser questions ? there is 3 LOS a, b, c but i dont see how they got these questions for this los, it seems from the los it was more qualitative ?

Big relief, Just read the schweser note before the reading begins and says to only focus on “Qualitative” aspects of this section. Thanks Goodness !!!

On Page 177 … “An Apparent Arbitrage and Resolution” … it says that the forward price is \$0.20. In TABLE 3 on the same page it says Long forward @\$0.20. But in the same table at Time 1 the cash flows for this position is \$0.20-F(0,1). If one is long forward the value of the forward at time t is (Spot price at time t- Forward price). Can somebody explain how the cash flows in the table correspond to the value of the forward? Thanks in advance. Any help is appreciated.

On Page 177 (Book 5, Reading 38) … “An Apparent Arbitrage and Resolution” … it says that the forward price is \$0.20. In TABLE 3 on the same page it says Long forward @\$0.20. But in the same table at Time 1 the cash flows for this position is \$0.20-F(0,1). If one is long forward the value of the forward at time t is (Spot price at time t- Forward price). Can somebody explain how the cash flows in the table correspond to the value of the forward? Thanks in advance. Any help is appreciated.