Profit or Loss to a Short Forward Position MCQ
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Question
The current price of a stock is $42. The stock does not pay dividends. A 3-month forward contract on this stock is priced at $44. What is closest to the profit or loss to a SHORT forward position if the spot price of the stock rises to $45 on the expiration date?
(a) $1 gain
(b) $1 loss
(c) $3 gain
(d) $3 loss
(e) $0
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