Question

Payoff to a short position in a forward contract where the forward price is Rs.30 and spot price at maturity is Rs.55 will be _____

Q: Answer-Payoff to a short position in a forward contract where the forward price is Rs.30 and spot price at...

For a short position, the person has agreed to sell the underlying asset at Rs.25. As such, if the spot price increases at maturity, there is a loss. Therefore, loss for the spot position is 30 55 -25

A Loss of 30

B Gain of 25

C Loss of 25

D Gain of 55

E Loss of 55

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Payoff to a short position in a forward contract where the forward price is Rs.30 and spot price at maturity is Rs.55 will be _____

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