Multiple Choice
Two assets and have the same spot price today.The price of asset is expected to grow at 10% over the next year and that of asset is expected to grow at 10% also.Asset has a standard deviation of returns of 10% over the year and asset has standard deviation of 15%.Which of the following is true if there are no holding costs or benefits?
A) Asset
's one-year forward price will be less than that of asset
B) Asset
's one-year forward price will be greater than that of asset
C) Asset
's one-year forward price will be equal to that of asset
D) Any of the above may be true.
Correct Answer:

Verified
Correct Answer:
Verified
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