How to calculate the value of a forward contract in Excel
Value of a long forward contract (continuous)
The value of a long forward contract with no known income and where the risk free rate is compounded on a continuous basis is given by the following equation:
f = S0 – Ke-rT
Where
S0 is the spot price
T is the remaining [...]
How to calculate the values of Forward Rate Agreements (FRA)
We are valuing an FRA for someone who is receiving fixed interest rate payments and who is paying floating interest rate payments.
Value of an FRA (zero coupon rate calculated on a discrete basis)
Where, L is the principal amount
RK is the fixed interest rate
RF is the forward interest rate [...]
How to calculate the forward price of a security in Excel
Forward Price of a security with no income
Forward Price of a security with no income is given by the formulap S0ert
.
For example if S0 , the spot price, of the asset is 100. The time to delivery in the forward contract is 6 months (or [...]
