CH 5 notations

Question 1

T

Answer 1

Time until delivery date in a forward or future contract in years

Question 2

S0

Answer 2

Price of the asset underlying the forward or future contracts today

Question 3

F0

Answer 3

Forward or future price today

Question 4

r

Answer 4

Zero-coupon risk-free rate of interest per annum with continuously compounding, for an investment maturing at the delivery date in T years

Question 5

K

Answer 5

delivery price for a contract that was negotiated in the past

Question 6

T

Answer 6

time to delivery date, in years

Question 7

r

Answer 7

the T-year risk-free interest rate

Question 8

F0

Answer 8

forward price that would be applicable if negotiated the contract today

Question 9

f

Answer 9

value of the forward contract today