B. Speculating (continued)

• 1. If Gold contract goes up to $500/ounce by May, then:

  • Profit = $500 - $459.40 = $40.60 * 100
  • Return = $4060/$3500 = 116%

• 2. If Gold contract goes down to $410.00/ounce by May, then:

  • Profit = $410 - $459.40 = - 49.40 * 100 - 4940/3500 = -1.41 or
  • Return = 141%

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