Spot and futures prices for Gold and the S&P in September $2007$ are given below. Given the above information, what

should the price of one futures contract be$?$

Table $1$: Gold and S&P $500$ Prices on September $7,2007$

Use prices for gold to calculate the effective annualized interest rate for Dec $2007$ and June $2008.$ Assume that the

convenience yield for gold is zero.

Suppose you are the owner of a small gold mine and would like to fix the revenue generated by your future

production. Explain how the futures market enables such hedges.

Calculate the convenience yield on the S&P index between September $07$ and December $07.$