Suppose silver is currently trading at $17 per troy ounce. You are evaluating a four-month carry trade
Question:
Suppose silver is currently trading at $17 per troy ounce. You are evaluating a four-month carry trade opportunity using silver. The appropriate interest rate is 3 percent, and the carrying cost is $.55 per ounce per month. If the current market price of a four-month futures contract on silver is $21 per troy ounce, calculate the potential carry trade profit per ounce.
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Using spotfutures parity we can determine what the price of a f...View the full answer
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Related Book For 
Fundamentals Of Investments Valuation And Management
ISBN: 9781266824012
10th Edition
Authors: Bradford Jordan, Thomas Miller, Steve Dolvin
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