\n The current price of gold is $1000 an ounce. The storage cost is $10 per year, payable semi-annually in advance (i.e. $5 at the beginning of every 6 months). Suppose the annual risk-free rate rf = 1%, compounding semi-annually. (a) What is the forward price of gold for delivery in one year? (b) After six months, the forward price for delivery in 6 months into the future has become $1100. What is the value of the long position in the original forward contract?\n <\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"
The current price of gold is $1000 an ounce. The storage cost is $10 per year, payable semi-annually in advance (i.e. $5 at the beginning of every 6 months). Suppose the annual risk-free rate rf = 1%, compounding semi-annually. (a) What is the forward price of gold for delivery in one year? (b) After six […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_joinchat":[]},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/posts\/228229"}],"collection":[{"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/comments?post=228229"}],"version-history":[{"count":0,"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/posts\/228229\/revisions"}],"wp:attachment":[{"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/media?parent=228229"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/categories?post=228229"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/tags?post=228229"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}