The current price of gold is 1600 per troy ounce there are, Ask an Expert

Finance

The current price of gold is $1,600 per troy ounce. There are no storage costs. The risk free rate of interest is 5% continuously compounded.

(a) What is the forward price of gold with delivery in 3 months?

(b) Calculate the cost of a collar, with 3 months to delivery, where the strike of all options used is 1620.126. The annual standard deviation of the gold price is 20%.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91787524

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