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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?
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