If the spot price of gold is $250 per ounce and the risk-free rate of interest is 10 percent per annum, the six-month forward price per ounce of gold, in equilibrium, should be closest to A. $250.00. B. $256.25. C. $262.50. D. $275.00.

Suppose there is a nonrenewable resource with inverse demand function p= 20- 2q and with MEC= 10. Suppose the time horizon is 2 periods. The resource stock, S is finite and = 50 units.a. If interest rates are 60%, how much should be extracted in each period?

Stock ABC has a Forward for December  at: $450, Is it reasonable that A PUT option on ABC, with a strike of  $500, costs $45?      A. No because the minimum intrinsic is $50.   B. No,  because $35 feels low for a stock with such a high price per share.   C. Yes because Intrinsic is $40, Extrinsic is $5   D. Yes because it depends on the distribution; that is defined by the volatility and time to maturity

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A share of stock currently costs $35. You can purchase either the shares, or options to buy the stock anytime this year at $38.50. These options cost $0.75 per. What price must the stock rise to this year to make the stock options equally profitable (meaning equal capital gain) to purchasing the stock? (Assume you exercise the options/sell the stock at this price.) What price must the stock rise to this year to make purchasing the stock options 6 times as profitable (meaning 6 times the capital gain) as purchasing the stock?

2. C = 50 + .8YD = 50 + .8(Y – T) %3D | = 150 %3D G = 200 T = 200 a) Calculate AY if AG = 100 (assuming that G could change all by itself). b) Calculate AY if AT = 100 (assuming that T could change all by itself). c) Calculate AY for AG = AT = 100.

If your investment earns 6% each year for two years and will be worth $540.80 after two years, its present value is Select one: a. $481.31. b. $450. C. $501.25. d. $510.33.