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You buy a forward contract on gold. The contract is for 1,000 ounces of gold at...

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Finance

You buy a forward contract on gold. The contract is for 1,000ounces of gold at a price of $1,271.10 an ounce and the currentmarket price for gold is $1,269.80 per ounce. The contract expiresin 6 months. The price at expiration for gold is $1325.65 perounce. As the buyer of the gold, what was your profit or loss aftertaking delivery on the contract?

$1,300

$54,550

$55,200

$55,850

Answer & Explanation Solved by verified expert
4.2 Ratings (509 Votes)
Solution In the case of a forward contract a If the spot price as on expiration date is below the forward price then the seller will receive the difference as a payment from the buyer a If the    See Answer
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Transcribed Image Text

You buy a forward contract on gold. The contract is for 1,000ounces of gold at a price of $1,271.10 an ounce and the currentmarket price for gold is $1,269.80 per ounce. The contract expiresin 6 months. The price at expiration for gold is $1325.65 perounce. As the buyer of the gold, what was your profit or loss aftertaking delivery on the contract?$1,300$54,550$55,200$55,850

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