The Spot Price of an Asset Is $50

Multiple Choice

The spot price of an asset is $50. The expected return on the asset is 10% a year (in simple terms) and the standard deviation of these returns is 20%. The risk-free rate of interest is 5% a year in simple terms. Assuming no costs or benefits of carry, what is the one-year forward price of the asset?

A) $52.50
B) $55.00
C) $57.50
D) $60.00