Platinum Is Currently Trading at $979

question 67

Multiple Choice

Platinum is currently trading at $979.45 per ounce with a carrying cost of $1.05 per ounce per month for storage and insurance. Given a current market price of $1,019.29 per ounce for a five-month futures contract, what is the potential carry trade profit per ounce if the interest rate is 4%?

• A)$1.05
• B)$5.20
• C)$18.42
• D)$20.33
• E)$25.83

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Definitions:

Confidence Interval

A statistical range, with a given probability, that is likely to contain the true value of an unknown parameter.

Small-Company Stocks

Shares of ownership in small-cap companies, often carrying higher risk but potentially offering higher returns compared to shares of larger corporations.

Capital Gains Yield

The change in price of a security over time, expressed as a percentage.

Geometric Average

A method of calculating the average rate of return that considers the compounding effect of returns over time.