(a) (b) (c) People say we are in a recession, but you don't believe them. You...
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(a) (b) (c) People say we are in a recession, but you don't believe them. You think the recession is almost over and that the price of gold will drop soon. You decide to short 2 gold futures contracts at a price of $1759.80 per ounce, expiring in 3 months. Assume an interest rate of r = 0.03 (3%). (Hint: 1 gold futures contract covers 100 ounces of gold). (1.50 Points) If the price of gold drops to $1750.42 per ounce, what is your total profit? If the price of gold rises to $1800.42 per ounce, what is your total profit? Create a payoff and profit diagram for this position. Be sure to label all axis. (a) (b) (c) People say we are in a recession, but you don't believe them. You think the recession is almost over and that the price of gold will drop soon. You decide to short 2 gold futures contracts at a price of $1759.80 per ounce, expiring in 3 months. Assume an interest rate of r = 0.03 (3%). (Hint: 1 gold futures contract covers 100 ounces of gold). (1.50 Points) If the price of gold drops to $1750.42 per ounce, what is your total profit? If the price of gold rises to $1800.42 per ounce, what is your total profit? Create a payoff and profit diagram for this position. Be sure to label all axis.
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Managerial Accounting Decision Making and Performance Management
ISBN: 978-0273764489
4th edition
Authors: Ray Proctor
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