A One Year Gold Futures Contract Is Selling for $641

question 16

Multiple Choice

A one year gold futures contract is selling for $641. Spot gold prices are $600 and the one year risk free rate is 6%.
-A hypothetical futures contract on a non-dividend-paying stock with current spot price of $100 has a maturity of one year.If the T-bill rate is 5% what should the futures price be?

• A) $95.24
• B) $100
• C) $105
• D) $107

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Definitions:

Lichen

Symbiotic organisms composed of a fungus and a photosynthetic partner (usually an alga or cyanobacterium) that live together and function as a single ecological unit.

Benefit From Each Other

A situation or relationship in which all parties involved gain advantages or positives from their association or interaction.

Plant Parasites

Organisms that derive nutrients at the expense of plants, often causing harm to their plant hosts.

Armillaria

A genus of parasitic fungi known to cause root rot in plants, some species of which are bioluminescent.