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?

Question

Quizplus · Accepted Answer

The futures price should be calculated using the formula: Futures Price = Spot Price * (1 + Risk-Free Rate). For the stock, it would be $100 * (1 + 0.05) = $105.

A One Year Gold Futures Contract Is Selling for $641