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

  1. A. USD 5,000

  2. B. USD 4,852

  3. C. USD 6,864

  4. D. USD 2,826

    Answer: B

    The value of the contract is: