Future price $ billion

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Suppose the current price of gold is $668 an ounce. Hotshot Consultants advises you that gold prices will increase at an average rate of 11% for the next two years. After that the growth rate will fall to a long-run trend of 2% per year. Assume that gold prices have a beta of 0 and that the risk-free rate is 5.25%. What is the price of 1.8 million ounces of gold produced in seven years? (Enter your answer in billions rounded to 2 decimal places.)

Future price $ billion

Reference no: EM13315141

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