Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Last year, a Gold Forward contract was priced at $1800 an ounce. Assume you went Long, but for only ONE ounce. That contract expires exactly

Last year, a Gold Forward contract was priced at $1800 an ounce. Assume you went Long, but for only ONE ounce. That contract expires exactly 6 months from NOW. NOW, the spot price of gold is $1700, and the annualized gold-interest rate is 4%. (a) What should the 6-month gold forward price be NOW. (b) What is the $ Value (i.e., current gain or loss) of your old position, Now?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Grow Your Small Business Profits How I Find A 100K In Any Business In 45 Minutes

Authors: Sharon Coleman

1st Edition

B0C9S9CCZJ, 979-8850917258

More Books

Students also viewed these Finance questions