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(C) You work as a commodities trader and are trying to calculate the no-arbitrage price of a forward contract on gold. The current spot price
(C) You work as a commodities trader and are trying to calculate the no-arbitrage price of a forward contract on gold. The current spot price of gold is 1,325 per kg and the annual risk-free rate is 3% per year, constant over time. The storage cost of gold is 50 per year per kg, and is paid at the beginning of each year the gold is stored. Assume the convenience yield for gold is zero. What is the 10-year forward price if the forward contract specifies 250kg of gold
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