The spot price for is $650.The dividend yield on the S&P 500 is 2.5%.The risk-free interest rate is 5%.The futures price for gold for a one year contract should be __________.
A) $658.58
B) $675.43
C) $682.50
D) $666.25

Question

Quizplus · Accepted Answer

The futures price can be calculated using the formula: Futures Price = Spot Price * e^(risk-free rate - dividend yield) * time. Plugging in the values: $650 * e^(0.05 - 0.025) * 1 = $666.25.

The Spot Price for Is $650