gold_etf_question

dcf.py

import numpy as np

def calculate_etf_value(discount_rate, gold_return, years_to_discard, future_year, simulations=10000):
    # Initialize a list to store the present values from each simulation
    present_values = []
    
    # For each simulation...
    for _ in range(simulations):
        # Randomly select a year for the gold to be discarded
        discard_year = np.random.uniform(0, years_to_discard)
        
        # If the future year is before the discard year, calculate the future value of the gold
        # Otherwise, the future value is 0
        if future_year < discard_year:
            future_value = 80 * (1 + gold_return) ** future_year
        else:
            future_value = 0
        
        # Calculate the present value of the future value of the gold
        present_value = future_value / (1 + discount_rate) ** future_year
        
        # Add the present value to the list
        present_values.append(present_value)
    
    # Calculate the average present value across all simulations
    etf_value = np.mean(present_values)
    
    return etf_value

# Customize your parameters
discount_rate = 0.08  # e.g., 5%
gold_return = 0.08  # e.g., 2%
years_to_discard = 50
future_year = 25  # The year in the future for which to calculate the present value

etf_value = calculate_etf_value(discount_rate, gold_return, years_to_discard, future_year)

print(f"The estimated ETF value is ${etf_value:.2f}")