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How do we value forward commitments at maturity?
Suppose investment company Omicron owns 25,000 common non-dividend paying shares of company ABC with a spot price of $154.58. Omicron enters into a forward contract with a financial intermediary to sell forward 25,000 shares at a forward price of $150 per share in 11 months. Calculate the value per share at maturity of the forward
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What are the main differences between futures and forwards?
When dealing with derivatives, we classify them into contingent claims and firm commitments. Futures and forwards are two of most well-known derivatives. Which of the following sentences is correct in relation to the differential characteristics between futures and options? a) Futures are an exchange-traded firm commitment derivative, while forwards are OTC (Over The Counter) contingent
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