Question
If the price on one ounce of gold for forward delivery in one year is $1,500, the interest rate is 1% per year, and the
If the price on one ounce of gold for forward delivery in one year is $1,500, the interest rate is 1% per year, and the cost of storing gold for one year is 2%, what is the current spot price per ounce of gold? In addition, if the forward price were below $1,500, describe a trading strategy that would generate arbitrage profits.
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Principles Of Managerial Finance Brief
Authors: Chad J. Zutter, Scott B. Smart
8th Global Edition
1292267143, 978-1292267142
