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.What is the one-year forward price of the asset?
A) $52.50
B) $55.00
C) $60.00
D) Cannot be calculated from the given information.
Correct Answer:
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