4. Consider two portfolios: A Hold the forward contract and K units of zero-coupon bonds B Hold one share of the underlying accet On the maturity date, A = S₁ -

K + K = ST = B. By no-arbitrage theory, we must have A = B at any time, i.e. f(S₁,t) + Ke(-) = S, and thus f(S₁,t) S-Ke-(T-1),