Suppose there is a risk premium of $0.50. The spot price is $20 and the futures price is $22. What is the expected spot price at expiration?
a. $21.50
b. $22.50
c. $20.50
d. $24.50
e. none of the above
Answer: E
Suppose there is a risk premium of $0.50. The spot price is $20 and the futures price is $22. What is the expected spot price at expiration?
a. $21.50
b. $22.50
c. $20.50
d. $24.50
e. none of the above
If the answers is incorrect or not given, you can answer the above question in the comment box. If the answers is incorrect or not given, you can answer the above question in the comment box.