Study Materials in Finance

Acc 403- Financial Mathematics

Introduction to Present-, Forward and Futures Prices Assume that we want to buy a number of coffee beans with delivery in nine months. However, we are concerned about what the (spot) price of coffee beans might be then, so we draw up a contract where we agree on the price today. There are now at least three ways in which we can arrange the payment: 1) we pay now, in advance. We call this price the present price of coffee beans with delivery in nine months' time and denote it by P. Note that t...