Difference between arbitrage free spot price and forward price

CFA Level I Fixed Income
#1

Hi.
In the workbook I have there is a question I haven’t been able to find any answer for.

Question: “An analyst computes two different Arbitrage free price (AFP) models, one using implied spot rates and the secondary model used forward rates derived from the same spot rates.
What would it indicate if the AFP(Forward) > AFP(Spot) and what position would be the most beneficial for the investor”
Example: A.F Forward: 103.4, A.F Spot: 103.1 = 103.4 > 103.1

I haven’t found any clear solution to this question and haven’t found anything on google.

My idea is: Since the forward price is higher, it indicates a incline (up) sloping spot curve and that the forward price will be more beneficial over the bond life.

Is my guess anywhere near correct or anything to add?
Thanks

#2

Which LOS has this question?
I have not come across it yet (I’m at Reading 43).

#3

Didn’t understand

#4

It would indicate that the analyst did at least one of the calculations wrong.

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