Futures contracts may have less risk than forward contracts

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1. Prove the initial value of a forward contract at the beginning of the contract (where t = 0)?

2. Explain why futures contracts may have less “risk” than forward contracts. What features and mechanisms ensure that this is the case?

3. At the beginning of the year, a firm has current assets of $380 and current liabilities of $210. At the end of the year, the current assets are $410 and the current liabilities are $250. What is the change in net working capital?

Reference no: EM131825287

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