Let the gold price (per oz) in year 0 (now), 1 (next year) and 2 (the year after) be P0, P1 , P2 and P3, respectively, and P0= $1400. Suppose that the expected rate of return on gold is rg=8.6% per year and the risk-free interest rate is rf=3% per year. Compute the expected cash flow of the following assets and their present value: please answer all parts A-H

Asset A pays in year 1 (one year from now).

(a) What is the expected cash flow of asset A?

(b) What is the present value of asset A?

Asset B pays in year 2.

(c) What is the expected cash flow of asset B?

(d) What is the present value of asset B?

Asset C pays in year 2.

(e) What is the expected cash flow of asset C?

(f) What is the present value of asset C?

Asset D pays (the average gold price in year 1 and 2) in year 2.

(g) What is the expected cash flow of asset D?

(h) What is the present value of asset D?