Question
The current spot price of gold is $1860 (per ounce), the futuresprice for a contract expiring in 3- months is $1870, and theappropriate risk-free rate
The current spot price of gold is $1860 (per ounce), the futuresprice for a contract expiring in 3- months is $1870, and theappropriate risk-free rate on a continuously compounded basis is 1%per annum. Assuming there is no convenience yield for gold, what isthe storage cost (as a % of the underlying spot price) for goldimplied by the market?
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Intermediate Accounting
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Nicola M. Young, Irene M. Wiecek, Bruce J. McConomy
11th Canadian edition Volume 2
1119048540, 978-1119048541
