Fundamentals of Derivatives Markets 7. The spot price of the market index is $900. A 3month forward contract on this index is priced at $930. The...

Fundamentals of Derivatives Markets7. The spot price of the market index is $900. A 3‐month forward contract on this index is priced at $930. The market index rises to $920 by the expiration date. The annual rate of interest ontreasuries is 4.8% (0.4% per month). What is the difference in the payoffs between a long index investment and a long forward contract investment? (Assume monthly compounding)A. $19.16B. $26.40C. $43.20D. $10.84