An investor owns 10 troy ounces of gold, currently valued at $1,830 dollars per ounce. She estimates that the price of gold will rise to
An investor owns 10 troy ounces of gold, currently valued at $1,830 dollars per ounce. She estimates that the price of gold will rise to $2,000 per ounce in the next year. If the interest rate is 8%, should she sell the gold today?
a) No, as the difference between the present value of selling now and selling in one year is -$219 dollars today.
b) Yes, as the difference between the present value of selling now and selling in one year is $219 dollars today.
c) Yes, as the difference between the present value of selling now and selling in one year is $236 dollars today.
d) No, as the difference between the present value of selling now and selling in one year is -$236 dollars today.
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Authors: Mark J. P. Anson
2nd Edition
047198020X, 978-0471980209
