1. Suppose you agree to purchase one-ounce of gold for $382 any time over the next month. The current price of gold is $380. The spot price of gold then falls to $377 the next day. If the agreement is represented by a futures contract marking to market on a daily basis as the price changes, what is your cash flow at the end of the business on the next day?
If the agreement is represented by a futures contract marking to ...
The solution answers a question on gold options and futures and the best decision for cash flow.