5. Suppose the gold spot price is $300/oz, the 1-year forward price is 310.686, and the continuously compounded risk-free rate is 5%.

a. What is the lease rate?

b. What is the return on a cash-and-carry in which gold is not loaned?

c. What is the return on a cash-and-carry in which gold is loaned, earning the lease rate?
For the next three problems, assume that the continuously compounded interest rate is 6%
and the storage cost of widgets is $0.03 quarterly (payable at the end of the quarter). Here is the forward price curve for widgets:
Year 0 Year 1 Year 2 Dec. Mar. June Sept. Dec. Mar. June 3.000 3.075 3.152 2.750 2.822 2.894 2.968