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Basic Question 0 of 5
Assume the risk-free rate is 5%. The current price of gold is $300 per ounce and the forward price of gold is $315 in one year's time. If you want to replicate a long forward position, you would ______.
B. short sell gold now at $300, deposit the money in the bank at 5% and buy it back in one year at $315
C. short sell gold and deposit the money in the bank at 5%
A. borrow money to buy gold at $300 now
B. short sell gold now at $300, deposit the money in the bank at 5% and buy it back in one year at $315
C. short sell gold and deposit the money in the bank at 5%
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I just wanted to share the good news that I passed CFA Level I!!! Thank you for your help - I think the online question bank helped cut the clutter and made a positive difference.
Edward Liu
Learning Outcome Statements
describe the use of CDS to manage credit exposures and to express views regarding changes in shape and/or level of the credit curve;
describe the use of CDS to take advantage of valuation disparities among separate markets, such as bonds, loans, equities, and equity-linked instruments.
CFA® 2025 Level II Curriculum, Volume 4, Module 30.