Futures and Forwards

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Futures and Forwards 1
Definition: A forward contract is a commitment to purchase/sell at a future date a given amount of an asset at a price agreed upon today F 0 is the forward price and represents the fixed price (agreed at t=0) for a future exchange S 0 represents the spot price prevailing today, S T represents spot price at future date Note: both parties bound to contract; no option value Forwards and Futures
Forwards and Futures Payoff A. Stomper, MIT, 2012
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