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Question #4: Price on Futures Contract [10 Points] (a) The price of silver is currently $18.07 per ounce. Assume that the risk-free interest rate is

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Question #4: Price on Futures Contract [10 Points] (a) The price of silver is currently $18.07 per ounce. Assume that the risk-free interest rate is 2.6 percent per year. If a futures contract on silver has a delivery (maturity) date in 3 months (T = 0.25), what should the futures price be today? [4 Points] (b) The price of silver is currently $18.07 per ounce. Suppose that a 1 year futures contract (T = 12) has a futures price of $18.54. What is the monthly risk-free interest rate? [6 Points]

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