Q. A swap that involves the exchange of a fixed payment for a floating payment can be interpreted as a series of forward contracts with different expiration dates. These implied forward contracts will most likely have:
- different prices due to differences in the price of the underlying at expiration.
- identical prices.
- different prices due to differences in the cost of carry.
The answer is 3)
But Shouldn’t it be same price and different value for each leg with some positive and some negative, but together they offset each other and become zero?