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1. (Pricing a forward contract with dividends) The current price of silver is $206 per ounce. The storage cost is $1 oun
Posted: Wed Mar 30, 2022 3:44 pm
by answerhappygod
- 1 Pricing A Forward Contract With Dividends The Current Price Of Silver Is 206 Per Ounce The Storage Cost Is 1 Oun 1 (28.24 KiB) Viewed 55 times
1. (Pricing a forward contract with dividends) The current price of silver is $206 per ounce. The storage cost is $1 ounce per year, payable quarterly in advance. Assuming a constant annual interest rate of 9% compounded quarterly, what is the theoretical forward price of silver for delivery in 9 months? Please submit your answer rounded to the nearest integer - for example, if your answer is 19.8, round it to either 20. 220 Incorrect Hint: follow the definition of forward contract and be careful with the compounding.