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Consider a 9-month forward contract established at rate of $28. The contract is 3 months into its life. The spot price is $30, the annual risk-free rate is 4 percent, and the underlying makes no cash payments. At month 3, determine:

a) the amount at risk of a credit loss;

b) which party bears credit risk, long or short?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92259768

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