20. (10 pts) Imagine that we have the following occur on the marketplace in relation to...
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20. (10 pts) Imagine that we have the following occur on the marketplace in relation to Gold: Spot Price of Gold is $1,200 Risk Free Rate is 2.5% No transaction costs No storage costs, convenience yield or lease rate on the gold. Now two cases are provided: one forward was trading at $1,245 and one was trading for $1,220. (1) What would be the final profit if one forward was trading at $1245? 20. (10 pts) Imagine that we have the following occur on the marketplace in relation to Gold: Spot Price of Gold is $1,200 Risk Free Rate is 2.5% No transaction costs No storage costs, convenience yield or lease rate on the gold. Now two cases are provided: one forward was trading at $1,245 and one was trading for $1,220. (1) What would be the final profit if one forward was trading at $1245?
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