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The income may be negative if the asset has carrying costs, such as insurance or storage costs. Suppose you have a single gold bar (400 troy ounces) in a storage unit in Mountain View. California. Rent for the storage unit is 100 per month (with payments starting immediately, not at the end of the month). The current price of gold is 1325 per troy ounce. Find the current forward price for the gold bar if maturity is 1 year from now. assuming the continuously compounded interest rate has constant value 3%.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92054909

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