The fair price of a 6-month futures contract on a commodity is $26.40. If the one-year storage cost of the underlying co

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answerhappygod
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The fair price of a 6-month futures contract on a commodity is $26.40. If the one-year storage cost of the underlying co

Post by answerhappygod »

The fair price of a 6-month futures contract on a commodity is
$26.40. If the one-year storage cost of the underlying commodity is
3.5% and the one-year risk-free rate is 1.7%, which of the
following is closest to the spot price of the commodity underlying
the futures contract?
A.
$23.97
B.
$25.06
C.
$25.72
D.
$26.08
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