The spot gold price is currently at $300/ounce. The Canadian Central Bank is contemplating leasing 300,000 ounces
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The spot gold price is currently at $300/ounce. The Canadian Central Bank is contemplating leasing 300,000 ounces of gold to Barrick at the lease rate of 3.75 percent. Barrick intends to sell the leased gold at the current price and invest the proceeds for six months at the Canadian T-bill rate of 5 percent. At the end of six months Barrick expects to have extracted enough gold to return the lease to the Canadian Central Bank. What is the six-month gold futures (forward) price, assuming storage and other costs are zero?
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Related Book For
Managing Global Financial And Foreign Exchange Rate Risk
ISBN: 9780471281153
1st Edition
Authors: Ghassem A. Homaifar
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