Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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A 136.

Gold has a current spot price of $1900 per ounce. The continuous compounding risk-free interest
rate is 7% annually for all maturities. The storage costs are $4 per ounce per year. What is the
equilibrium price of gold futures to be delivered in 1 year?
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Transcribed Image Text:Gold has a current spot price of $1900 per ounce. The continuous compounding risk-free interest rate is 7% annually for all maturities. The storage costs are $4 per ounce per year. What is the equilibrium price of gold futures to be delivered in 1 year?
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