A one-year gold futures contract is selling for $1,141. Spot gold prices are $1,200 and the one-year
Question:
a. According to spot-futures parity, what should be the futures price?
b. What risk-free strategy can investors use to take advantage of the futures mispricing, and what will be the profits on the strategy?
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a The theoretical futures price S 0 1 r f T 1200 1 02 1224 At 1141 the g...View the full answer
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Related Book For
Essentials of Investments
ISBN: 978-0077835422
10th edition
Authors: Zvi Bodie, Alex Kane, Alan J. Marcus
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