The spot price of the market index is 900 a 3-month forward

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The spot price of the market index is $900. A 3-month forward contract on this index is priced at $930. The market index rises to $920 by the expiration date. The annual rate of interest on treasuries is 4.8%.What is the difference in the payoffs between a long index investment and a long forward contract investment?

Reference no: EM13569028

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