Please add some comment. why it is the case.
Suppose that the price of the forward contract for the Treasury bond was negotiated off-market and the initial value of the contract was positive as a result. Which party makes a payment and when is the payment made?
A) The short pays the long at the maturity of the contract. B) The long pays the short at the maturity of the contract. C) The long pays the short at the initiation of the contract.
Your answer: B was incorrect. The correct answer was C) The long pays the short at the initiation of the contract.
If the value of a forward contract is positive at initiation then the long pays the short the value of the contract at the time it is entered into. If the value of the contract is negative initially then the short pays the long the absolute value of the contract at the time the contract is entered into. (Study Session 16, LOS 54.a)