Question
a. If the spot price of gold is $984 per troy ounce, the risk-free interest rate is 4%, and storage and insurance costs are zero,
a. If the spot price of gold is $984 per troy ounce, the risk-free interest rate is 4%, and storage and insurance costs are zero, what should be the forward price of gold for delivery in one year?
b. Calculate risk-free arbitrage profits if the forward price is $1,084.(Round your final answers to nearest whole dollar amount.)
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Entrepreneurial Finance
Authors: J . chris leach, Ronald w. melicher
4th edition
538478152, 978-0538478151
