Question
a. If the spot price of gold is $988 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 $988 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? (Round your answer to 2 decimal places.)
b. Calculate risk-free arbitrage profits if the forward price is $1,088. (Round your final answers to nearest whole dollar amount.)
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Healthcare Finance Modern Financial Analysis For Accelerating Biomedical Innovation
Authors: Andrew W. Lo, Shomesh E. Chaudhuri
1st Edition
0691183821, 978-0691183824
