Explanation : The fund manager entered into a contract to sell the stock to HBL at PKR
250 per share in 3 months’ time. 35,000 * PKR 250 = PKR 8,750,000.
Option B is correct because it is a deliverable contract. If it was a cash
settled contract, then option C would be correct.
Explanation : The convenience yield and interest income are benefits of holding the
asset which are subtracted from the compounded spot price and reduces
the commodity’s forward price. The opportunity cost is the risk-free rate,
which increases the commodity’s forward price.