Question
please type the answer by computer, so i can see it clearly, thank you!!! Within the next three months, you expect geopolitical friction between Russia
please type the answer by computer, so i can see it clearly, thank you!!!
Within the next three months, you expect geopolitical friction between Russia and Ukraine. You believe the gold price will rise if this occurs.
Question:
1(a) Suppose that the gold currently sells for $1,800 per ounce. If the risk-free interest rate is 0.25% per month, what will be the three-month maturity futures contract price?
1(b) A gold futures contract calls for delivery of 100 Troy ounces of gold. The initial margin requirement is 5%. Assume the futures contract is fairly priced, how much initial margin you need to deposit if you long 10 contracts?
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