1. Suppose the CAPM holds, RF- 24%, and the expected return on the market portfolio is 6%. Assume continuous compounding. A company will sell 1 unit of gold a year from today. Assume the mean price of gold GT to be $190 in a year, and the standard deviation of the gold price GT to be $20. Assume that the gold ,3 : .9. (a) Find the value of the rm if it did no hedging. (h) If the rm went short $ ,8 times the value of the rm in (a) of the market portfolio, and invested the proceeds in risldesa debt, then what would be the hedged rmls beta? Vial-hat would be its expected return, and what would be the market 1.ralue of the rm? (c) Find the forward price of a 1year forward contract on a unit of gold. Find the value of the rm if it hedged its gold price risk in the forward market