The current spot price of the rare element Pb is 500.00 per ounce. The 9-month forward price of one ounce of Pb is 511.92. What is the continuously compounded risk-free interest rate implied by these prices? Possible Answers A 2.14% 3.14% c 4.14% D 5.14% Not enough information was given

The current spot price of the rare element Pb is 500.00 per ounce. The 9-month forward price of one ounce of Pb is 511.92. What is the continuously compounded risk-free interest rate implied by these prices? Possible Answers A 2.14% 3.14% c 4.14% D 5.14% Not enough information was given

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

Problem 1PS

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Question

The current spot price of the rare element Pb is 500.00 per ounce. The 9-month forward price of one ounce of Pb is
511.92.
What is the continuously compounded risk-free interest rate implied by these prices?
Possible Answers
A 2.14%
B 3.14%
4.14%
05.14%
Not enough information was given

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