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Find the Forward Price for One Forward Contract for Gold

question 6

Essay

Find the forward price for one forward contract for gold that is selling for $1,449 spot, if the storage cost is $10 for the year and financing cost is 10% per year.


Definitions:

Cash Dividends

Payments made by a company to its shareholders out of the company's profits in the form of cash.

Fair Market Value

It's the price at which an asset would change hands between a willing buyer and a willing seller, each having reasonable knowledge of all necessary facts.

Paid-in Capital

The total amount of money that shareholders have invested in a company by purchasing shares of stock.

Paid-in Capital

The amount of money a company has received from shareholders in exchange for shares of stock.

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