1.A company entered in a one-year forward contract that buying 100 ounces of gold three months ago. When the price was USD 1,000 per ounce. The nine-month forward price of gold is now USD 1,050 per ounce. The continuously-compounded risk-free rate is 4% per year for all maturities and there are no storage costs. The value of the contract is closet to:
A. USD 5,000
B. USD 4,852
C. USD 6,864
D. USD 2,826
Answer: B
The value of the contract is: