After 3 months the new spot price is R140. What will be the profit /loss to the long position in 3 months?

Given the information below.

Spot = R100
Risk-free rate = 10%
Maturity = 1 year

Expert Solution

Given spot price = 100

Interest rate = 10%

For 3 months interest rate = 2.5%

Interest = 100 *2.5% = 2.5

Profit = 40 - 2.5 = 37.5

(140-100=40).

jeff jeffy answered 1 year ago

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Question

After 3 months the new spot price is R140. What will be the profit /loss to the long position in 3 months?

Solutions

Expert Solution

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