An off-market forward contract is a forward where either you have to pay a premium or you receive a premium for entering into the contract. (With a standard forward contract, the premium is zero.)...

Extracted text: An off-market forward contract is a forward where either you have to pay a premium or you receive a premium for entering into the contract. (With a standard forward contract, the premium is zero.) Suppose the effective annual interest rate is 11 % and the S-R index is 1000. Consider 1-year forward contracts. a) Suppose you are offered a long forward contract at a forward price of $ 1310. How much would you need to be paid to enter into this contract $ 144.1 ? b) Suppose you are offered a long forward contract at a forward price of $ 1035. How much would you need be willing to pay to enter into this contract $ 113.85 ?