Gold has a spot price of $3650 and the four month futures price is $3545. The four

Fantastic news! We've Found the answer you've been seeking!

Question:

Gold has a spot price of $3650 and the four month futures price is $3545. The four month continuously compounded risk-free interest rate is 4.5 per cent per year. The storage costs for Gold is 1.5 per cent per year continuously compounded.

Calculate the convenience yield on Gold?

Related Book For answer-question

Advanced Accounting

ISBN: 978-0538480284

11th edition

Authors: Paul M. Fischer, William J. Tayler, Rita H. Cheng

See More Books

Posted Date: May 02, 2023 12:15 AM

See More Questions

How much additional margin must be deposited in one month? How much additional margin must be deposited in 2 months? What is the profit from this futures trade? What would the profit be of the...
KYC's stock price can go up by 15 percent every year, or down by 10 percent. Both outcomes are equally likely. The risk free rate is 5 percent, and the current stock price of KYC is 100. (a) Price a...
Case Swimmers Headphones1 Finally! Its the end of 2019 and you are sitting at your new desk in a plush office in north Bogota, with a delicious cup of Colombian coffee. You think about all it took to...
- Given the following data for a company: Equity E 800,000 USD -Debt D=200,000 USD - Invested Capital IC = 1,000,000 USD E/IC-80% - D/IC=20% -Cost of debt k=9% - Beta-1.6 - D/E=0.25 compute the cost...
Collar B has a mass of 4 kg and is attached to a spring of constant 1500 N/m and of undeformed length of 0.4 m. The system is set in motion with r = 0.2 m, v = 6 m/s, and vr = 0. Neglecting the mass...
Gorav Dental Group started 2010 with Accounts Receivable of $120,000 and an Allowance for Uncollectible Accounts balance of $6,000. The following information relates to Gorav Dentals 2010 operations:...
From net sales to the number of warehouses, the ten-year operating and financial highlights on pages B-2-B-3 of Appendix B in this textbook provide a historical perspective to Costco's growth. This...
Southern Atlantic Distributors began operations in January 2011 and purchased a delivery truck for $40,000. Southern Atlantic plans to use straight-line depreciation over a four-year expected useful...
For each of the following tell which test statistic is most appropriate to use to test the research question and why. If more than one is appropriate, you must state both. Your choices are: z for X,...
A four-year financial project has estimates of net cash flows shown in the following table: It will cost $65,000 to implement the project, all of which must be invested at the beginning of the...
After reading the article, researching several other sources for information on the situation, respond to the following questions in your Post to this Unit\'s Discussion - be sure to justify your...
8) The massless ring shown on the right is at equilibrium. What is 0, the angle between the rope providing T3 and the rope providing T? T Sina Sin =80 N T = 50 N T=80 50 Sin (0) 60
1. Explain briefly how spending can multiply, and then calculate the spending multiplier when the MPC is a. 0.75 b. 0.8 c. 0.6 2. The economy is experiencing a contraction (recessionary gap) of $400...
In 2024, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. The road was completed in 2026. Information related to the contract is...
The speed limit on the New York State Thruway is 65mph, exactly. Considering that 1.00mi=1.61km, a) What would the speed limit be in kph (kilometers per hour) if the United States were to convert to...
How does our strategic approach account for and adapt to emerging trends and technological disruptions ?
How can HR professionals expand physician recruiting and talent programs? How to utilize cost-effectiveness of attracting and retaining top medical talent?
Starr Co. had sales revenue of $540,000 in 2014. Other items recorded during the year were: Cost of goods sold ..................................................... $330,000 Salaries and wages...
Lucy Company issues securities with a fair value of $468,000 for a 90% interest in Diamond Company on January 1, 2011, at which time Diamond Company has the following balance sheet: It is believed...
Luxor Corporation has a 100% interest in a foreign subsidiary known as Luminaire. The foreign subsidiary was created for the primary purpose of distributing electronic components throughout a number...
Mack County has acquired equipment through a non-cancelable lease-purchase agreement dated December 31, 2017. This agreement requires no down payment and the following minimum lease payments: 1. What...
When incomes rise, the demand for health care _________ because health care is a _________ good.
_________ exists in health care when insurance makes a person more likely to engage in more risky behavior and less likely to take preventative measures against illness.
Third-party payers attempt to reduce moral hazard problems with _________ and _________.

Gold has a spot price of $3650 and the four month futures price is $3545. The four

Question:

Expert Answer:

The convenience yield is 697 Working Note Given Spot price 3650 4 months ... View the full answer

Advanced Accounting

Students also viewed these finance questions