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S. A forward contract on 100 oz of gold starts on 5th April. The deliv rice on 5th April is $600 / oz. The gold price six month later, i.e. on efore). The risk-free interest rate is 10% per year (use 5% for six me old. The forward price in the contract in the beginning is lect one: a. $600

S. A forward contract on 100 oz of gold starts on 5th April. The deliv rice on 5th April is $600 / oz. The gold price six month later, i.e. on efore). The risk-free interest rate is 10% per year (use 5% for six me old. The forward price in the contract in the beginning is lect one: a. $600

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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6. A forward contract on 100 oz of gold starts on 5th April. The delivery date is exactly six months later, i.e. 5th October. The gold price on 5th April is $600 / oz. The gold price six month later, i.e. on 5th October is $650/ oz (known only on 5th October, not before). The risk-free interest rate is 10% per year (use 5% for six months). Assume no income from gold and no storage cost for gold. The forward price in the contract in the beginning is Select one: a. $600 O b. $630 c. $570 O d. $650
Transcribed Image Text:6. A forward contract on 100 oz of gold starts on 5th April. The delivery date is exactly six months later, i.e. 5th October. The gold price on 5th April is $600 / oz. The gold price six month later, i.e. on 5th October is $650/ oz (known only on 5th October, not before). The risk-free interest rate is 10% per year (use 5% for six months). Assume no income from gold and no storage cost for gold. The forward price in the contract in the beginning is Select one: a. $600 O b. $630 c. $570 O d. $650
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