2. The Concept of Pricing vs. Valuation
b. distinguish between value and price of forward and futures contracts;
What is the value of a forward, futures, or swap contract at initiation date? The value of a forward, futures and swap contract is zero at initiation date. Its price is the fixed contract price. Both price and value are relevant in determining the profit for both parties.
Source:
CFA
Graph:
- 115.080.02 Derivatives - Reading 49 - Basics of Derivative Pricing and Valuation to 115.080.02.02 - Reading 49 - 2. The Concept of Pricing vs. Valuation