Today Is January 1

question 4

Multiple Choice

Today is January 1.The forward price for a gold forward maturing on April 1 is $1,560 per ounce.The continuously compounded interest rate is 6 percent per year.Then the forward price for a forward contract on gold maturing on July 1 is:

• A) $1,529.56
• B) $1,541.08
• C) $1,569.24
• D) $1,583.58
• E) None of these answers are correct.

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Definitions:

Isoquants

Curves that represent combinations of inputs that produce the same level of output, used in production theory.

Output

Output refers to the quantity of goods or services produced by a firm, industry, or economy within a certain period.

Increasing Returns

An economic principle where a proportionate increase in inputs leads to a greater proportionate increase in outputs, typically seen in production processes.

Constant Returns

A situation in production where increasing the inputs by a certain proportion results in an increase in output by the same proportion.