Calculate the price of a 1year forward contract on gold Assu

Calculate the price of a 1-year forward contract on gold. Assume the storage
cost for gold is $5.00 per ounce, with payment made at the end of the year.
Spot gold is $900 per ounce and the risk-free rate is 5%.

Question options:

1)

2)

3)

4)

Solution

Option. 1)$950

Priceof 1 year forward contract on gold = $900+$900*5%+$5

=$950