3.13 Valuing a forward contract Page 50 Suppose that K is delivery price in a forward contract Fo is forward price that would apply to the contract today The value of a long forward contract, f, is f=(F0-K)e7 Similarly, the value of a short forward contract is ( K-F oe-rT Options Futures, and other Derivatives, 5th edition C 2002 by John C. HullOptions, Futures, and Other Derivatives, 5th edition © 2002 by John C. Hull 3.13 Valuing a Forward Contract Page 50 • Suppose that K is delivery price in a forward contract F0 is forward price that would apply to the contract today • The value of a long forward contract, ƒ, is ƒ = (F0 – K )e –rT • Similarly, the value of a short forward contract is (K – F0 )e –rT