The spot price for gold is $1,550 per ounce. The dividend yield on the S&P 500 is 2.5%. The risk-free interest rate is 3.5%. The futures price for gold for a 6-month contract on gold should be ________.

Name: The spot price for gold is $1,550 per ounce. The dividend yield on the S&P 500 is 2.5%. The risk-free interest rate is 3.5%. The futures price for gold for a 6-month contract on gold should be ________.
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Question

Quizplus · Accepted Answer

F₀ = S₀(1 + r_f - d)^T = $1,550(1 + 0.035 - 0.025)^0.5 = $1,557.73

The Spot Price for Gold Is $1,550 Per Ounce