What is the relationship between the delivery price and the forward price. So far all I know is that the delivery price remains fixed when setting up a contract while the forward price constantly changes.
In one of my textbooks I saw a formula stating; $$ D = (S_0-F_0)e^{rT} $$ where
- $D$ is the delivery price,
- $F_0$ is the forward price at time 0,
- $S_0$ is the stock price at time 0.
Can anyone elaborate on why this is the case or perhaps give an example.