Utility Function Exercises

Gold futures The current price of gold is 412 per ounce The storage cost is 2 per ounce per year, payable quarterly in advance. Assuming a constant interest rate of 9 compounded quarterly, what is the theoretical forward price of gold for delivery in 9 months 2. Proportional carrying charges o Suppose that a forward contract on an asset is written at time zero and there are M periods until delivery Suppose that the carrying charge in period k is qS k , where S k is the spot price of the asset...