Question
Kinross is a major Gold Producer. They are expecting a production of 500,000 oz of Gold in 6 months (they are long Gold). The Forward
Kinross is a major Gold Producer. They are expecting a production of 500,000 oz of Gold in 6 months (they are long Gold). The Forward is : $1,800/ troy oz
Kinross Purchases a 6 month Gold Put Struck at $1,800/ oz , for $80 per oz
1- How much will it cost them to buy the Gold put, and
2- what is the break evenon the ENTIRE position (the expected revenue less the option premium)?
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Intermediate Financial Management
Authors: Brigham, Daves
10th Edition
978-1439051764, 1111783659, 9780324594690, 1439051763, 9781111783655, 324594690, 978-1111021573
