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: