Problemsuppose the spot price of gold is 1200 per ounce the, Ask an Expert

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Problem:

Suppose the spot price of gold is $1200 per ounce. The futures price for delivery in six months is $1208, while the futures price for delivery in one year is $1214. The interest rate on 6-month loans is 1.00percent (on an annual basis).

Required:

Question: What is the implied interest rate for the first six months?

Note: Provide support for your rationale.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91163366

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