Assume that the one-month rate of interest is zero. What does the decomposition of the target forward in Part 2 tell you about the value of the call option embedded in the target forward? Use the following steps:
Summary: This question belongs to finance and discusses about discusses about simplified version of the target forwards contracts.
Answer is in Excel format
Download Full Solution
If you are here for the first time, you can request for a discount coupon, which can knock off upto 20% of the quoted price on any service.