yog arorilbt The spot price of silver is $25 per ounce. Thestorage costs are 0.5% per year. Assuming that interestrates are 5% per annum calculate the futures price of silverfor delivery in 9 months. (both storage costs and interestrate are continuously compounding).

Compound interest is the interest on interest. Under this method the accumulated interest is added…

Answered: yog arorilbt The spot price of silver…

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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The spot price of silver is $30 per ounce. The storage costs are $0.25 per ounce per year payable quarterly in advance. Assuming that interest rates are 7% per annum for all maturities, calculate the futures price of silver for delivery in 10 months.
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14: answer
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yog arorilbt The spot price of silver is $25 per ounce. The storage costs are 0.5% per year. Assuming that interest rates are 5% per annum calculate the futures price of silver for delivery in 9 months. (both storage costs and interest rate are continuously compounding).