One-year goldfish futures are currently selling forn$77.50nper contract. Goldfish are currently selling forn$60neach (this is an expensive
Fantastic news! We've Found the answer you've been seeking!
Question:
One-year goldfish futures are currently selling forn$77.50nper contract. Goldfish are currently selling forn$60neach (this is an expensive breed of goldfish due to its rarity). Goldfish costn$8nper year to house and feed which is a cost paid in advance each year. The current risk free rate isn10%npa continuously compounded.
a) Calculate the theoretical one-year goldfish futures price. Give your answer in dollars and cents to the nearest cent. Futures price =$n
b) Given these cand tions, an arbitrager should the goidfish now and one-year goldfish futures contracts.
Related Book For
Financial Institutions Management A Risk Management Approach
ISBN: 978-0071051590
8th edition
Authors: Marcia Cornett, Patricia McGraw, Anthony Saunders
Posted Date: