Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Suppose you purchased one-ounce of gold for $1050 for delivery next month. Yesterday's price of gold was $1000. The spot price of gold then falls
Suppose you purchased one-ounce of gold for $1050 for delivery next month. Yesterday's price of gold was $1000. The spot price of gold then falls to $995 today. If the contract is marked to market on a daily basis as the price changes, what is your cash flow per ounce of gold at the end of the day today? (ignore contract size) A. $0 B. $5 C. -$5 D. $55 E. -$55 Suppose in the above question, you are the seller instead of the buyer, what is your cash flow at the end of the day today? A. $0 B. $5 C. -$5 D. $55 E. -$55
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started